Bad economic times and volatile jet fuel prices are forcing America West Airlines to lay off some managers and administrators. In addition, the company plans to reduce the fees it pays to vendors by at least 20 percent.
Meanwhile, employees can help the airline's cause by forwarding any revenue-generating ideas to supervisors, chief executive Doug Parker said this week in a letter to its 13,000 employees.
While there are no plans to cut flights, the company will need to cut yearly costs by $100 million to help ensure it avoids bankruptcy, something that has become more common in an industry that remains in economic crisis, Parker wrote.
“I am also asking our senior leadership team to review their budgets with a goal of reducing management, professional and administrative payroll costs by at least 10 percent, which, unfortunately, will result in fewer employees within these workgroups,” he wrote. The airline declined to give an exact number.
The Tempe-based company said it hopes to avoid layoffs or pay cuts for front-line workers such as pilots, flight attendants and gate agents.
“However, those options will have to be considered in the near future if conditions do not improve,” Parker said.
The company has yet to see bookings decline as a result of the war with Iraq, said Janice Monahan, company spokeswoman. But projections several months ahead show bookings are down due to weak economic conditions, she said. Parker said the company projects a cash balance of about $300 million at the end of the first quarter. The cost reductions are necessary to maintain “sufficient liquidity in this uncertain environment.”