Northwest Airlines said on Wednesday it would cut its frontline and management staff by 8 percent as part of a sweeping capacity reduction aimed at offsetting the rising cost of jet fuel.
Northwest, the latest carrier to announce job cuts, estimated the reduction and a variety of new fees would generate USD$250 million to USD$300 million annually.
The job cuts -- about 2,500 in all -- will affect all Northwest employee groups, the carrier said. Northwest has about 31,000 employees worldwide.
"These reductions are the direct result of our extraordinary fuel costs and the necessary actions we must take to right-size our airline and eliminate unprofitable flying," Northwest Chief Executive Doug Steenland said in a statement.
The airline, which plans to merge with Delta Air Lines, has said it would reduce its capacity systemwide by 8.5 percent to 9.5 percent in the fourth quarter.
The airline industry is rapidly downsizing as rising fuel bills undo the financial progress carriers have made through restructuring and fare increases in recent years.
Other major airlines -- including American Airlines, United Airlines and Delta -- also have announced job cuts related to capacity reductions.
Northwest said it would attempt to achieve its staff reduction with voluntary early-out programs, leaves, work rule changes and attrition. Layoffs could follow if too few employees leave voluntarily.
The carrier also said it would attempt to boost revenue through new fees, such as a USD$15 charge to check a single bag. Other carriers have implemented that fee, which met with scorn from travelers.
Other measures include a higher ticket change fee and a service fee for tickets awards through the carrier's frequent flier program.
After Northwest and Delta made public their merger proposal in April, industry experts predicted more mergers would follow.
The most likely candidates, United Airlines and US Airways, however, called off their talks without a deal.
The industry focus now is on strategic alliances and large-scale capacity cuts.
