War could give airlines legal wiggle room for more layoffs NEW YORK (AP) =97 While a war in Iraq will most likely weaken demand for air= =20 travel, it could also provide struggling carriers with legal cover to=20 reduce bloated costs by laying off significant numbers of employees without= =20 violating existing labor contracts. As they did shortly after the terrorist attacks of 2001, major carriers=20 could invoke "force majeure" clauses in labor contracts, freeing them from= =20 union-negotiated agreements related to seniority and work rules =97=20 stipulations that can make it difficult to cut jobs. Force majeure is the=20 legal term for uncontrollable events that release parties from their=20 contractual obligations. "It's something they would have to look at if they= =20 see their losses multiplying as a result of war," Jim Corridore, an airline= =20 analyst at Standard & Poor's in New York, said Wednesday. Analysts blame=20 the airline industry's whopping losses over the past two years on excessive= =20 labor expenses, poor economic conditions and the decrease in spending by=20 business travelers. Corridore said industrywide capacity needs to be=20 reduced significantly to better reflect today's diminished demand. And with= =20 fewer planes, the airlines would need fewer employees, Corridore said. "Force majeure would allow them to impose furloughs on employees without=20 going up against labor agreements," he said. Of course, unions would likely respond to any force majeure invocations by= =20 suing the airlines =97 just as they did after the Sept. 11 attacks =97=20 claiming that the industry's woes are really tied to the weak economy.=20 "We'll probably wind up in court to fight it," said O.V. Delle-Femine,=20 national director of the Aircraft Mechanics Fraternal Association, which=20 represents 13,400 workers at Northwest Airlines. In fact, a lawsuit the=20 union filed on behalf of 600 workers fired after Sept. 11 is still pending,= =20 Delle-Femine said. Last month, Delta Air Lines was forced by an arbitrator= =20 to cancel the planned furlough of 20 pilots because of a lawsuit filed by=20 the Air Line Pilots Association. Earlier battles against the Atlanta-based= =20 carrier's use of force majeure were unsuccessful, though. Ray Neidl, an=20 analyst at Blaylock & Partners, said there's evidence that passenger=20 traffic has already dropped off in anticipation of war and that this could= =20 weaken carriers' claims that a decrease in business was unforeseen. It really depends on the length and severity of the military conflict,=20 Neidl said. The chief executive of Northwest Airlines, Richard Anderson, said earlier=20 this week that war would necessitate "further cost reductions" at the=20 Eagan, Minn.-based carrier. That could signal Anderson's intention to=20 declare force majeure, said Peter Capelli, professor of management at the=20 University of Pennsylvania's Wharton School of Business. "Once one of them= =20 does it, they all will," Cappelli said. Since the Sept. 11 attacks, major=20 airlines have laid off roughly 100,000 employees and industrywide capacity= =20 is down about 14% from where it was two years ago. But passenger traffic=20 and ticket prices have also fallen sharply, resulting in bankruptcy filings= =20 by US Airways and United Airlines and industrywide losses of $9 billion in= =20 2002. *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@xxxxxxxxx Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Site of the Week: http://www.thehummingbirdonline.com TnT Webdirectory: http://search.co.tt *********************************************************