Airlines Make Severe Cuts

THE ASSOCIATED PRESS

September 16, 2001

Airlines imposed drastic cutbacks yesterday in an effort to avoid bankruptcy after last week's terrorist attacks, with Continental and Northwest joining American Airlines in slicing schedules by 20 percent. Continental also furloughed one-fifth of its work force, or about 12,000 people.

The industry, already hurting because of the economic slowdown, lost at least two days of business when the federal government grounded air traffic after the attacks by hijacked jetliners on the World Trade Center and the Pentagon. With the public nervous about flying after the attacks, business is likely to suffer even more in the coming months.

The nation's airlines are expected to lose billions of dollars by year-end. Analysts fear that without a huge bailout from the federal government, even the largest carriers could go out of business.

Continental chairman and chief executive Gordon Bethune said reduced demand from fearful travelers, extensive losses from the aviation shutdown and higher expenses from tough new security requirements called for dramatic change. Continental has lost $30 million a day and the planes that are back in the air are mostly half-empty.

"We are doing this in survival mode," Bethune said.

Neither American, the nation's largest airline, nor No. 4 Northwest specified how many jobs would be affected by their service cuts. Eagan, Minn.-based Northwest implemented the cutbacks yesterday and said it would complete a review of its staffing needs by next week. American, based in Fort Worth, Texas, announced scaled-back service on Friday.