Northwest said it will also take actions that will result in a $135-million incremental improvement in 2001 financial results and implement measures to defer discretionary and other non-operationally critical spending.
Among the reductions are flights between Osaka and the following cities: Seattle, Kuala Lumpur, Los Angeles and Manila. The daily flight from Manila to Osaka will be discontinued effective Oct. 27, 2001.
Cost savings also will be realized by closing reservations sales centers in Garden City, New York and Honolulu, as well as a flight attendant base in Chicago. The Honolulu DC-10 pilot base was closed earlier this year.
As a result of the further cost containment measures, Northwest expects to decrease its management and contract payrolls by about 1,500 positions. This will be achieved through attrition, and voluntary leaves, leaving open positions unfilled and layoffs. Of this total, the estimated number of layoffs will be approximately 500, including 130 management positions.
"The decision to reduce staff is a difficult one for us, explained Northwest Airlines CEO Richard Anderson. "Northwest, like the rest of the airline industry, continues to experience the impact of a weak US economy that has resulted in reduced business travel. In addition, high fuel prices are affecting the cost of flying. We must be fiscally prudent to ensure our costs going forward are in line with our expected revenues."
"While Northwest is taking this cost containment actions to address near term revenue declines, we remain firmly committed to our strategic plan to position Northwest for future growth," Anderson said.
"We will continue our aggressive plans to acquire new aircraft, modernize our hub airport facilities, especially the new $1.2 billion Detroit Midfield complex and enhance our World Business Class products," he said.