Dutch and UK carriers join growing list of troubled airlines to axe jobs and reduce capacity as crisis hits North Atlantic traffic

While Swissair and Sabena have been the most badly affected by the terrorist attacks in the USA, Europe's other major airlines are continuing to adjust capacity, with KLM and BMI British Midland becoming the latest airlines to announce sweeping cuts.

KLM had previously announced a 5% capacity cut, and has now increased this to 15% in available seat kilometres with effect from the end of the month. This will be achieved through the deployment of smaller aircraft and a reduction in frequencies, with the cuts equating to four widebody aircraft and three narrowbodies, says the airline. The capacity cuts will mainly apply to North Atlantic routes, but will affect the entire network.

A hiring freeze has been instigated and around 2,500 jobs will be affected, it adds, with contracts not being renewed when they expire. The airline has also asked unions and employees to consider a substantial pay cut. KLM cautions that "more far-reaching measures may have to follow in view of the uncertainty on further developments in the global airline industry".

Meanwhile, BMI is to remove eight aircraft from its operations, and cut around 600 jobs to achieve a 20% reduction in capacity for its winter 2001-2 schedules. "Our intention is to operate lower capacity aircraft wherever possible and to maintain the present network," says BMI chairman Sir Michael Bishop. "We will increase frequencies or capacity only when strategic opportunities occur," he adds.

The airline operates Boeing 737s, Airbus A320/A321s, A330s and Fokker 100s but has not yet specified which aircraft are affected, although more details are expected later this month.

So far, BMI says it has only experienced a 4.5% year-on-year reduction in traffic, but warns that it expects "the full impact of changing market conditions to become apparent in the final quarter".

Austrian Airlines Group, which includes Austrian Airlines and Lauda Air, is undertaking a 10% capacity cut and retiring four aircraft. Some North American and Middle East routes will be dropped. The four aircraft that will be parked comprise two Austrian Airbus A340-200s and two Lauda Air Boeing 737s. Up to 800 jobs are reportedly being axed, providing a €50 million ($46 million) saving.

Fellow Star Alliance member Lufthansa has increased the number of aircraft it will take out of service to 28, with its Airbus A320, A340 and Boeing 737 and 747-200s fleets affected.

It is imposing an $8 per flight leg ticket surcharge to cover increased security, insurance and other fixed costs resulting from the 11 September terrorist attacks in the USA.

The airline is also trimming more flights between Germany and the USA, including 13 round trips from Frankfurt, four from Munich and one more as yet unspecified service to New York. The cuts reflect a 20% reduction in seat capacity.

British Airways says it experienced a seven percentage point fall year-on-year in passenger load factors to 69.2% last month, while its traffic in revenue passenger kilometres (RPK) terms dropped by 22%. Although the airline cut capacity to offset this, it only fell by 13.8% which resulted in its load factor continuing to shrink.

UK airport group BAA says that the overall traffic at its airports, which include London Heathrow, Gatwick and Stansted, fell by 6% year-on-year for September. However, after the 11 September attacks, traffic fell by 10.6%.

Source: Flight International