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Alaska will cut jobs, flights
Airline to reduce departures 15%
Published: September 13th, 2008 12:30 AM
In recent months Alaska Airlines has retired its least fuel-efficient jets, raised fares, imposed new fees and doubled the productivity of its airport check-in process.

But the changes weren’t enough to counter higher fuel costs and a lower travel demand, the airline said Fri- day as it announced flight and work-force reductions beginning in November.

The airline, headquartered in the City of SeaTac, will eliminate 15 percent of the 500 departures it flies each day. Those reductions will trigger a work-force reduction of up to 1,000 people.

Alaska is the dominant carrier at Sea-Tac Airport. Along with its sister regional airline, Horizon, it accounts for half of the flights in and out of Sea-Tac. The airline has not said how many of its 150 local flights each day will be cut.

Alaska is the latest among U.S. airlines to announce significant cutbacks to trim unprofitable flights.

“The one-two punch of record oil prices and a softening economy on top of increased competition has burdened Alaska Air Group with a $50 million loss on an adjusted basis for the first half of the year,” Alaska Chairman Bill Ayer said Friday.

“We are changing our schedule to make sure we’re flying the right routes with the right frequency and right aircraft. Regrettably, a reduced schedule means we need fewer employees.”

The flight reductions will take several forms:

 • Fewer flights at low-demand times such as holidays and weekends.

 • Fewer flights in high-frequency markets such as Sea-Tac-California where Alaska already has multiple flights daily.

Even with typical reductions of one flight per day in the Sea-Tac-San Francisco and Sea-Tac-Los Angeles markets, Alaska still will have more daily flights than at the same last year. Alaska bolstered its schedule earlier this year to compete with new rivals Virgin America and JetBlue.

 • Downsizing aircraft it uses on Portland-Bay Area flights from Alaska 737s to Horizon Air CRJ-700 jets or Q400 turboprops.

 • Ending seasonal flying between San Francisco and three Mexican destinations, Cancun, Mazatlan and Ixtapa in Mexico. Alaska will continue serving those cities through Los Angeles.

 • Halting Portland-Orlando and Vancouver, B.C.-San Francisco flights. Those changes were effective Aug. 24. Alaska will continue to serve Orlando twice daily from Sea-Tac.

The company said it hopes to eliminate many of the 1,000 jobs through attrition and by closing many open positions. It also plans to offer early-out and severance packages.

The union representing Alaska’s 1,500 pilots warned that the airline could cut pilot ranks too far.

“We are concerned that, particularly as oil prices continue to plummet, Alaska Airlines will reduce its pilot ranks so severely that our management will create a situation in which our carrier will be unable to take advantage of its strong cash position and respond to opportunities to grow as other airlines cut routes and capacity,” said Bill Shivers, chairman of the Alaska Airlines Master Executive Council of the Air Line Pilots Association.

Alaska spokeswoman Marianne Lindsey said falling fuel prices in the last few weeks have helped the airline’s bottom line, but noted fuel costs remain 50 percent higher than at this time last year.

“The fall is traditionally a lower demand period and with the economy softening up, we’re just not seeing the demand for some of these flights,” she said. “We wish that there was something less painful that we could do, but we need to cut back on flights that are not operating full,” she said.

The airline said it had hoped other economic and income-raising measures would have helped balance out higher fuel expenses, but those have proven insufficient.

The airline has raised fares on some routes multiple times this year. It has imposed a $25 fee on second checked bags and retired the last of its fuel-guzzling MD-80s jets.

Alaska has realigned its frequent flier program to require more miles for free flights, and it has implemented new check-in procedures at Sea-Tac to reduce personnel requirements and speed up the check-in times.

John Gillie: 253-597-8663

blogs.thenewstribune.com/business


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