Top heavy at Northwest and bottom heavy at American?

What a week it has been for the US air transport industry, eh? Mesa Air Group appears to have narrowly avoided Chapter 11 after prevailing in a court case against Delta Air Lines. US Airways and United Airlines have decided that a merger doesn’t make sense under current economic conditions (note to Delta and Northwest). And American Airlines has begun axing its schedule in line with its capacity-slashing plan. With respect to the latter, it looks like employees at American and its sister American Eagle Airlines will learn of the magnitude of management’s planned layoffs by early July.


In a Q&A document addressed to mainline pilots, obtained by yours truly, American says the fourth quarter capacity cuts announced last week will result in employee reductions companywide. “It will take about four to six weeks to determine the specific schedule adjustments and the resulting effect on employees,” says the carrier, which has suspended all pilot recruitment activities.


But why cut frontline employees? Unfortunately it will be necessary to reduce employees in all workgroups across the company. It’s important to note that management has taken aggressive measures during the past several years to reduce its own ranks by nearly a third since 2001. For example, today American represents the best-in-class performance, as measured by our ranking in ratio of officers and director level employees to employees, tied with Delta Air Lines overall,” says American in the Q&A.


So if American and Delta lead the industry with one officer or director for approximately every 330 employees, who is worst-in-class? That distinction belongs to Northwest, according to American, which notes that the Minneapolis/St Paul-based carrier “has one officer or director for approximately every 95 employees”.


It looks like Northwest has some serious managerial trimming to do. While both Delta and Northwest have pledged not to close hubs or furlough frontline workers as a result of a merger, their respective CEOs Richard Anderson and Doug Steenland in mid-May acknowledged at a House aviation subcommittee hearing that there will be management-rank reductions, and these will take about two months to figure out. So expect some info in July. If I was a manager at Northwest, I know what I’d be doing right now (and it would come from the Neal Cohen playbook).

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