Northwest Airlines (NASDAQ: NWAC) announced today that it will reduce its system-wide flight schedule by approximately twelve percent, as measured on an available seat mile basis.
The carrier is taking this action because of a drop in passenger demand due to both the threat of and now the commencement of hostilities with Iraq. As world events unfold, Northwest will continue to monitor passenger demand to determine whether additional actions are necessary.
Because of the reductions, Northwest estimates that approximately 20 DC-9, A320, 757-200, DC10-30, and 747-200 aircraft will be removed from service. Schedule changes will impact the airline’s North American, Asia/Pacific and European routes.
Northwest is proactively contacting customers impacted by the schedule reduction. Passengers may also check the status of their reservations at the airline’s web site, www.nwa.com, by calling Northwest Airlines Reservations at 1-800-225-2525, or through their travel agent. Schedule changes will be displayed in all reservation systems by March 29.
“We apologize to our customers for any inconvenience this schedule reduction might be causing them. However, we must take this measure in response to the reduction in demand due to the war with Iraq,” Richard Anderson, chief executive officer said.
The airline also announced that because the level of flying is being reduced substantially and aircraft are being removed from service, Northwest is forced to reduce its overall staffing level by about 4,900 employees. All employee groups will be affected.
The carrier will decrease its payroll through attrition, voluntary leaves, leaving open positions unfilled and layoffs. A relief package including pay, medical coverage and flight privileges will be offered to employees who are furloughed due to the latest staff reduction.
Furloughed employees eligible for relief pay are those whose contractual rights do not allow them to take another job in the Northwest Airlines system. The package provides between one and four weeks of base pay, determined by years of service with the company. In addition, it includes medical coverage through April 30, 2003. Full travel privileges will remain in place through December 31, 2003.
“Clearly, the last two years have been a difficult and painful period for our employees. Due to the weak demand for business travel which emerged in March, 2001, the subsequent impact of the terrorist attacks on the United States in September of that year, and now, armed conflict with Iraq, we have been forced to reduce our workforce by some 17,000 employee positions,” Anderson added.
Northwest Airlines is the world`s fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,500 daily departures. With its travel partners, Northwest serves nearly 750 cities in almost 120 countries on six continents. In 2002, consumers from throughout the world recognized Northwest’s efforts to make travel easier. A 2002 J.D. Power and Associates study ranked airports at Detroit and Minneapolis/St. Paul, home to Northwest’s two largest hubs, tied for second place among large domestic airports in overall customer satisfaction. Business travelers who subscribe to OAG print and electronic flight guides rated nwa.com as the best airline Web site. Readers of TTG Asia and TTG China named Northwest “Best North American airline.”