America West forced to cut costs By Hal Mattern, The Arizona Republic America West Airlines said Monday that worsening economic conditions will=20 force it to cut costs $100 million a year through management and=20 administrative layoffs and reductions in the fees it pays to vendors. The=20 airline said in a letter to employees that there would be no layoffs or pay= =20 cuts for front-line workers, such as pilots, flight attendants and airport= =20 gate agents. No reductions are planned in the airline's flight schedule.=20 But Douglas Parker, America West's chairman and CEO, warned in the letter=20 that "those options will have to be considered in the near future if=20 conditions do not improve." Parker said he has asked the airline's senior=20 management team to reduce management, professional and administrative=20 payrolls 10%, which will result in an undetermined number of layoffs. The=20 airline's business partners and vendors will be asked to reduce their fees= =20 by at least 20%. Affected companies could include everything from small=20 printers to major aircraft lessors, many of whom agreed to cut their fees=20 after the Sept. 11, 2001, terrorist attacks. Parker said the airline is=20 projecting a $300 million cash balance at the end of the first quarter, but= =20 another $100 million in cost reductions would be necessary because an=20 expected rebound in the airline industry hasn't materialized. "Now, with the war against Iraq a reality, we face the strong possibility=20 of conditions growing even worse," he said. America West officials reported= =20 strong passenger traffic last week, even after the war began, because of=20 spring break travelers and Cactus League fans. The airline filled 90% of=20 its available seats Sunday. But officials of the airline also said that=20 bookings for future travel had begun to fall off significantly late last=20 week. That has led to concerns that a prolonged war could reduce travel in= =20 the peak summer season, further cutting into the airline's revenue. "It=20 sounds like they are trying to prepare the company for a little bit longer= =20 war than originally expected," said Scott Andrews, an official with the Air= =20 Line Pilots Association at America West. Pilots union members overwhelmingly rejected a contract proposal last week= =20 that would have given them an 11% pay raise. If ratified, the contract=20 would have cost the airline about $30 million a year. America West's=20 cutbacks fall short of those announced recently by other major airlines,=20 which are reducing their flight schedules and laying off thousands of=20 employees. Hawaiian Airlines filed for Chapter 11 bankruptcy protection=20 Friday, and some other carriers, including American, are struggling to=20 avoid a similar fate. United Airlines and US Airways filed for bankruptcy=20 protection last year. "Looking at the news coming out of the other airlines, it's a good thing=20 that we're not doing that here," said Bill McGlashen, president of the=20 Flight Attendants Association chapter at America West. "Obviously we are=20 aware that it could happen, but we appreciate the effort to focus on=20 management cuts." Parker said America West has been able to avoid reducing= =20 flights and taking other drastic measures by adopting a new fare structure= =20 that attracted more business travelers and by working to keep costs down.=20 But he said unstable fuel prices and lower travel demands are placing added= =20 pressure on the airline's financial condition. "We simply cannot sit and=20 hope that things will somehow get better =97 we need to act," Parker wrote= to=20 employees. *************************************************** 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 *********************************************************