Northwest to cut 2,500 jobs, add bag, ticket-redemption fees

10.07.2008 10:00 Shopping - Source: toledoblade.com

Michigan's largest passenger air carrier said it expects the new fees to add $250 million to $300 million a year in revenue.

Northwest said the cuts of about 8 percent of its work force will include front-line and management workers. It said it will start with voluntary departures and leaving open jobs unfilled before moving to layoffs to reach the 2,500 total.

In June, Northwest said it would ground 14 Boeing 757 and Airbus jets during the final three months of 2008. It also said that only 61 of its aging DC-9 jets would remain in its fleet by the end of December. It had 94 DC-9s at the beginning of 2008 and 103 a year ago.

Overall, Northwest is reducing its domestic and international flying by up to 9.5 percent, the airline said a regulatory filing. In its previous round of cuts, announced in April, Northwest said it would reduce flying capacity by about 7 percent this year.

Executives of American Airlines parent AMR Corp. said last week they expect to cut 8 percent of the work force, or about 6,800 jobs. Continental Airlines Inc. has announced 3,000 job cuts.

As of the end of 2007, Northwest had about 30,000 employees.

Northwest's fee of $15 for the first checked bag matched one announced by American, US Airways, and United Airlines. Northwest's new fee applies to tickets sold after today for travel starting Aug. 28 in the United States or to Canada.

The fee for issuing frequent-flier tickets is to begin Sept. 15. The airline said it will charge $25 for domestic tickets, $50 for trans-Atlantic tickets, and $100 for trans-Pacific tickets.

Doug Steenland, the airline's president and chief executive officer, said, "As fuel comes down, we will revisit this decision."

Last month Delta Air Lines Inc. announced a $25 surcharge for redeeming frequent flier tickets for domestic travel and $50 for international.

Delta, which is buying Northwest, has not added a fee for the first checked bag.

American Airlines was the first major U.S. carrier to announce a fee on first checked bags.

Spokesman Tim Smith said Northwest's moves "clearly show they are facing the same extreme challenges all airlines are dealing with these days."

American also charges $50 to $100 to book a frequent-flier ticket within less than 21 days.

Randy Petersen, editor of FrequentFlyer magazine, said U.S. airlines have been later than their European and Asian counterparts in adding fees for frequent-flier awards.

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