Outsourcing and online bookings. Latest moves by American Eagle and Continental to cut jobs
Even as pilots are continuing to grumble about mainline jobs going to regional airlines, so too are American Eagle pilots, now that Chautauqua has joined the American Airline stable at Chicago from its former TWA deployment over St Louis. American Eagle, one of the highest cost, and least profitable major/regional alliance programs, is continuing to look at cutting costs and has hired Republic Airways Holdings subsidiary to do it, as part of a “broader reshaping” of American’s O’Hare operations, the Chicago Tribune reported. Chautauqua has been an American Connection carrier since 2000.
Spokesperson, Andrea Huguely, told CAPA’s America Airline Daily that the vast majority of regional flying out of O'Hare will remain with American Eagle, which has 98% of all of the carrier’s regional flying, leaving the remaining 2% for the American Connection program. The stage length for the Chautauqua flying will be much reduced, as most of the routes on which it will be deployed are shorter than that flown over St Louis.
American put the American Eagle subsidiary on the block in 2008, but then, in 2009, dropped plans to sell it when there were no takers.
The Chautauqua American Connection program is substantial, covering 15 cities in the Midwest, despite the fact that, according to pilots, such outsourcing is not allowed under the current contract. American disagrees. American’s contract with O’Hare was originally part of its TWA-inherited operation over St Louis, which is being downsized considerably.
American wants to strengthen and rebuild traffic at O’Hare and Raleigh-Durham and is part of a move to increase operations this Summer to O’Hare operations through which American Eagle will also benefit. American is focusing its largest regional jets – the Bombardier CRJ 700 – at Chicago, with 22 new jets expected this year, as well as some re-deployments from Dallas. American is expecting to add 70 daily RJ flights this Summer, making O’Hare the carrier’s largest hub, putting DFW is number two place.
Changing passenger behaviour impacting employment at Continental
Meanwhile, Continental is cutting 600 reservations jobs now that it has trained passengers to use Continental.com rather than calling in to the reservations centre, which carriers a USD20 fee. The reduction comes from 250 reservations agents already on leave and the addition of another 350. Passenger purchases from websites mean 15% fewer calls at its reservations centre.
It is only the latest in layoffs from the US airline industry that has undergone 18 consecutive monthly declines in employment, according to the US Department of Transportation’s Bureau of Transportation Statistics, which reported a 3.3% decline in the number of full-time-equivalent employees in Dec-2009 from Dec-2008. BTS reported that the December FTE total of 379,100 for the scheduled passenger carriers was 12,900 below Dec-2008 and the lowest total for any month since 1993.
Delta was the lone carrier to add employees even as it completes the merger with Northwest. The seven network airlines employed 258,100 FTEs in December, 68.1% of the passenger airline total, while low-cost carriers employed 16.5% and regional carriers accounted for 13.9%.
Along with the six mainline carriers dropping employees comes Southwest, Spirit and Frontier which also reported declines in FTEs in the year-on-year comparisons. The regionals also reported declines, including American Eagle, SkyWest, Atlantic Southeast Airlines, Pinnacle Airlines, Horizon Air, Mesa Airlines, Air Wisconsin Airlines, Mesaba Airlines, PSA Airlines and Colgan Airlines.
American and American Eagle topped the list for the most employees in the network and regional categories for December while Southwest employed the most FTEs among low-cost airlines. Seven of the top 10 employers in the industry are network airlines.
The network carrier employment dropped 2.5% in Dec-2009 year-on-year with Northwest taking the biggest decline at 6.1%. Network airlines employed 6,600 fewer FTEs in Dec-2009 than in Dec-2008. American was down 4.9%; US Airways, 4.6%; United Airlines, 4.0%; Continental Airlines, 3.9%; and Alaska Airlines, 3.1%. Delta increased FTEs by 7.8%.
United took the biggest percentage hit at 18%, down 9,700 FTEs between Dec-2005 and Dec-2009. Northwest followed United with a 17.6% decline. The other 2005 to 2009 FTE decrease was American, down 10.9%. The increases were at Alaska, 3.4%; Continental, 1.4%; Delta, 0.7%; and the combined US Airways, 48.9%.
Many LCCs increase employee numbers
Allegiant, Virgin America, AirTran and JetBlue reported increases in FTEs between Dec-2008 and Dec-2009, up 16.1%, 12.9%, 4.7% and 4.6%, respectively. The six low-cost carriers reporting employment data in both 2005 and 2009 employed 14.2% more FTEs in Dec-2009 than in Dec-2005. Allegiant reported the largest percentage increase, up 182.0%. Spirit reported the only four-year decrease within the low-cost group, down 6.8%.
Regionals feeling pinch
Regional airline FTEs were down 8.9% in Dec-2009 compared to Dec-2008, the 16th consecutive month with a decline from the same month of the previous year. Two Delta Connection carriers – Comair and Mesaba – the most impacted by the Northwest/Delta merger, were down 53.1% and 40.4%, respectively, the largest declines in the group. However, with the addition of Frontier and Midwest to its employee rosters, Republic Airways Holdings was up 88.6%. GoJet was also up 25.8% for the period.
Regional carrier FTEs declined 6.7% from Dec-2005 to Dec-2009. The 15 regional carriers reporting employment data in both 2005 and 2009 employed 13.9% fewer FTEs in Dec-2009 than in Dec-2005. Comair reported the largest percentage decline, down 59.0%, followed by PSA, down 38.5%, and Atlantic Southeast, down 35.1%. GoJet reported the biggest four-year gain, 136.3%, followed by Shuttle America at 75.7%.