Northwest to cut 2500 jobs, add fees

Northwest Airlines announced yesterday that it would be laying off 2,500 employees in all groups of positions (pilots, mechanics, flight attendants, and other employees), but that it would first be looking for volunteers to leave the company. A variety of "voluntary programs including early-out programs, voluntary leaves, work rule modifications and attrition" will be offered, with the airline moving to furloughs as a last resort.

“Our fuel costs have more than doubled in the past year,” said Doug Steenland, President and CEO. “In order to manage through this unprecedented fuel challenge, we have to take action to both control costs and increase our revenue... These reductions are the direct result of our extraordinary fuel costs and the necessary actions we must take to right-size our airline and eliminate unprofitable flying." Last month, Northwest said that it would reduce its system capacity by 8.5%.

In additions, the airline is introducing a set of new fees: for travel in the US and Canada, it will charge $15 for the first checked bag, $25 for the second and $100 for three or more checked bags. Northwest also rolled out new fees for using frequent flier miles as well as ticket changes. Steenland said, “We expect these three incremental revenue enhancing measures to generate $250 million to $300 million a year, which will help ease the burden of these record high oil prices.”