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US LCCs increase employee levels in Jun-2010, but overall airline employment levels weaker

19-Aug-2010
US Secretary of Transportation, Ray LaHood
US Secretary of Transportation, Ray LaHood

US Department of Transportation's Bureau of Transportation Statistics (BTS) reported that US LCC full-time equivalent employee (FTE) levels in Jun-2010 increased 0.9% year-on-year, marking the seventh consecutive month of year-on-year FTE increases and the second consecutive June of FTE gains.

US LCC year-on-year** change in FTE* levels

Month

2007

2008

2009

2010

January

4.8

-9.7

-3.1

1.4

February

5.3

-10.2

-3.0

1.4

March***

4.7

-13.3

0.1

1.2

April

6.0

-15.2

1.2

0.5

May

5.6

-14.8

1.2

0.6

June

5.6

-14.9

0.8

0.9

July

6.1

-16.1

0.9

 

August

5.5

-16.4

-0.2

 

September

6.2

-17.3

-0.1

 

October

-11.3

-1.5

-0.4

 

November

-10.3

-2.8

-0.1

 

December

-10.6

-3.3

0.0

 

Five LCCs reported year-on-year FTE increases in the month, namely: Frontier Airlines (+10.1%), Allegiant (+10.0%), Virgin America (+8.8%), Spirit (+7.8%) and JetBlue (+4.3%). Southwest and AirTran reported year-on-year FTE Reductions.

The six LCCs reporting employment data in both 2006 and 2010 employed 11.9% more FTEs in Jun-2010 than in Jun-2006, with Allegiant reporting the largest percentage increase, up 121.0%.

US LCC Full-time Equivalent Employees*: Jun-2006 to Jun-2010**

Rank

 

2006

2007

2008

2009

2010

Percent Change** 

2006-2010

2009-2010

1

Southwest

31,735

33,261

34,285

35,296

34,636

9.1

-1.9

2

JetBlue

9,675

9,675

10,523

10,776

11,234

16.1

4.3

3

AirTran

7,167

8,147

8,279

8,200

8,083

12.8

-1.4

4

Frontier

4,484

4,940

4,949

4,391

4,833

7.8

10.1

5

Spirit

2,039

2,191

2,453

1,905

2,053

0.7

7.8

6

Allegiant

739

951

1,299

1,485

1,633

121.0

10.0

7

Virgin America***

N/A

N/A

1,189

1,449

1,576

N/A

8.8

8

ATA****

2,650

2,405

N/A

N/A

N/A

N/A

N/A

9

America West*****

11,651

12,471

N/A

N/A

N/A

N/A

N/A

 

Total

70,140

74,041

62,977

63,502

64,048

11.9

0.9

Meanwhile, US LCCs had 64,000 FTEs in Jun-2010, an 8.7% reduction from Jun-2006 levels, but the highest level since Feb-2008. 

US LCC Full-time Equivalent Employees* by Month**

FTE employees (000)

2006

2007***

2008

2009

2010

Percent Change

2006-2010

2009-2010

January

68.4

71.7

64.7

62.7

63.6

-7.0

1.4

February

68.7

72.3

64.9

63.0

63.8

-7.0

1.4

March****

69.4

72.6

62.9

63.0

63.8

-8.0

1.2

April

69.6

73.8

62.5

63.3

63.6

-8.7

0.5

May

69.8

73.7

62.8

63.5

63.9

-8.4

0.6

June

70.1

74.0

63.0

63.5

64.0

-8.7

0.9

July

70.2

74.5

62.5

63.0

     

August

71.3

75.2

62.9

62.8

     

September

71.1

75.5

62.5

62.4

     

October

71.7

63.6

62.7

62.4

     

November

71.9

64.5

62.7

62.6

     

December

72.5

64.8

62.6

62.6

     

12-Month Average

70.4

71.4

63.1

63.0

     

Jan-June Average

69.3

73.0

63.5

63.2

63.8

-8.0

1.0

24th month of FTE reduction; airline staff levels reach record lows

Overall, US scheduled passenger airlines employed 2.4% fewer workers in the month, marking the 24th consecutive reduction in FTE levels for the scheduled passenger carriers from the same month of the previous year.

While the June FTE number was the highest since Jan-2010, the overall trend is that airline employment in the US is now at its lowest point in 13 years, with one in four airline employees being shed in the last decade.

Reducing labour costs has helped most US carriers return to profitability in the Jun-2010 quarter, with the quarter being the best three-month period for US airlines in three years. The trend to reduce labour expenses is set to continue, with airline consolidation, outsourcing and the increased reliance on IT – for such functions as online reservations and check-in and self baggage scanners – likely to continue to reduce the need for as many airline employees.

Meanwhile, the Jun-2010 level represents the second lowest level in 20 years, despite annual passenger traffic increasing approximately 65% over the same timeframe.

US Total Passenger Airline* Full-time Equivalent Employees** by Month

Month (000s)

2006

2007

2008

2009

2010

Percent Change

2006-2010

2009-2010

January

405.6

404.1

418.7

390.6

379.4

-6.5

-2.9

February

404.3

405.8

419.0

391.6

378.0

-6.5

-3.5

March

404.9

407.9

415.5

392.1

377.3

-6.8

-3.8

April

404.4

410.0

415.4

392.1

376.2

-7.0

-4.1

May

403.5

412.3

415.5

387.4

377.0

-6.6

-2.7

June

403.7

413.9

414.4

387.7

378.3

-6.3

-2.4

July

403.2

414.4

411.1

386.8

     

August

404.6

415.2

406.7

384.3

     

September

403.6

416.1

397.3

379.9

     

October

403.4

417.9

394.2

379.7

     

November

404.3

419.5

392.1

379.4

     

December

404.8

419.7

391.8

379.1

     

12-Month Average

404.2

413.1

407.6

386.0

     

Jan-June Average

404.4

409.0

416.4

390.2

377.7

-6.6

-3.2

Aircraft manufacturing job levels also down in Jun-2010

Meanwhile, earlier this month, the Bureau of Labor Statistics reported that aircraft manufacturing jobs fell to 226,500 in Jun-2010, down from 233,800 in Jun-2009, with total airline related employment (airline carriers and manufacturing) rose by 1,100 to 604,800.

US aircraft manufacturing employment levels: Dec-2009 to Jun-2010

Employment (000s)

Dec-2009

Jan-2010

Feb-2010

Mar-2010

Apr-2010

May-2010

Jun-2010

Aircraft manufacturing

231.4

230.7

229.0

228.2

227.7

226.7

226.5

Monthly % Change

-0.1%

-0.3%

-0.7%

-0.3%

-0.2%

-0.4%

-0.1%

Level Change

-0.2

-0.7

-1.7

-0.8

-0.5

-1.0

-0.2

               

Carrier and manufacturing

610.5

610.1

607.0

605.5

603.9

603.7

604.8

Monthly % Change

-0.1%

-0.1%

-0.5%

-0.2%

-0.3%

0.0%

+2.0%

Level Change

-0.5

-0.4

-3.1

-1.5

-1.6

-0.2

+1.1

US unemployment jumps to highest level in six months

This is reflective of the overall trend in the US, with the US Department of Labor stating, in its Unemployment Insurance Weekly Claims Report that, in the week ending 07-Aug-2010, the advance figure for seasonally adjusted initial jobless benefits claims was 484,000, an increase of 2,000 from the previous week's revised figure of 482,000. The four-week moving average was 473,500, an increase of 14,250 from the previous week's revised average of 459,250. The data reveals that the number of Americans filing new claims for jobless benefits reached the highest level in six months in the week, adding to US recovery concerns.

Despite US airlines returning to profitability in the second quarter – as traffic demand improves, with passenger levels, load factors and yields increasing accordingly – the nation’s airlines as a whole have not yet resumed hiring. The nation’s LCCs have, however, been more inclined to boost employee levels, as they add capacity back into the market to capitalise on improved demand levels.


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