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The Honolulu Advertiser
Posted on: Thursday, September 20, 2001

The September 11th attack
Aloha Airlines to cut 250 jobs

By Michele Kayal
Advertiser Staff Writer

Aloha Airlines joined a long list of carriers across the nation announcing cutbacks yesterday, saying it would trim its work force by about 8 percent, with some cuts effective immediately.

The company, which has had a work force of 3,000, will let go roughly 250 people, all of them from its interisland operation, Aloha spokesman Stu Glauberman said yesterday,

Aloha's chief executive officer, Glenn Zander, said the airline's West Coast and freight shipping operations will not be affected.

Starting Monday, Aloha will reduce its flight schedule by 26 percent. The airline will knock 37 interisland flights from its daily roster, reducing the total to 113.

Hawaiian Airlines also expects to announce schedule and employee cutbacks, said chief executive officer Paul Casey, possibly as early as next week.

"We're looking at what capacity we will need in the next three to six months, and once we've determined what that capacity will be, we'll make an announcement," Casey said. "The problem is trying to figure out exactly how bad it's going to be. No one knows how bad it's going to be."

Hawai'i's local airlines have been caught in the wave of cutbacks and layoffs announced by the United States' major carriers since last week's terrorist attacks on the World Trade Center and the Pentagon in which hijackers used fuel-laden passenger aircraft as bombs. As airlines across the country take desperate measures to staunch a business devastated by shutdowns and wary travelers, state governments and federal lawmakers are also looking for ways to buoy the struggling industry.

And the declines and cutbacks at the national carriers could be felt in Hawai'i as well.

United Airlines — with two of its planes among the four involved in last week's attack — announced yesterday that it is laying off 20,000 employees, or 20 percent of its

work force, and that the whole company would be affected.

As the largest carrier serving Hawai'i, United employs more than 1,800 pilots, flight attendants, mechanics, reservationists and others here, but company officials said yesterday it is unclear how they will be affected.

"Different stations will be affected differently, depending on loads, performance and business factors," said United spokeswoman Liz Meagher. "Right now, our executives are evaluating the business from top to bottom and determining where the schedule will lay and how many employees we need to support that schedule."

United announced a 20 percent schedule reduction last weekend, cutting its daily flights to about 1,900. Yesterday it announced it would cut 20,000 jobs in connection with the route reductions.

United's announcement came within hours of an announcement by rival carrier American Airlines that it would also cut at least 20,000 jobs.

The move by American, the nation's No. 1 airline, brought the total number of layoffs by U.S. carriers to more than 66,000.

Continental Airlines, which has 425 people based in Hawai'i, said Saturday that it would reduce its flight schedule by about 20 percent and would furlough about 12,000 employees, possibly including some in Hawai'i.

"It's all related to the level of flight activity in the market," said Continental spokeswoman Julie King. "In Hawai'i, we're maintaining 100 percent of our schedule. The furloughs will be directly related to the level of flying."

Meanwhile, Gov. Ben Cayetano said yesterday he would waive airport landing fees, saving Aloha and Hawaiian about $6 million apiece each year. Collectively, airlines landing in Hawai'i would save more than $30 million a year.

Aloha and Hawaiian are also seeking an antitrust exemption that would allow them to coordinate certain aspects of their businesses, such as scheduling, congressional aides have said.

On Capitol Hill, the House and the Senate are trying to craft bills that would offer the industry financial assistance, such as direct aid, loans and payment for some security expenses. A bill might also include an antitrust waiver not only for Aloha and Hawaiian, but for all U.S. airlines.

Delta Air Lines Chairman Leo Mullin told Congress yesterday that the industry wanted $12.5 billion in credit and loans.

An administration official said President Bush will ask Congress to give the airlines $5 billion in immediate cash aid plus significant help with their insurance liability — but not, for now, the loans that the industry says it needs to avert bankruptcies.

Bush will immediately spend $3 billion of the emergency money that Congress gave him over the weekend to pay for airline and airport security improvements such as fortified cockpits, sky marshals and additional airport searches.

White House advisers briefed key congressional staff on the package late yesterday.

Under Bush's proposal, the government would give airlines "temporary terrorism risk insurance" on all their domestic flights for 180 days. Until now, only international routes have had such coverage.

Bush is also proposing to help shield airlines from inevitable lawsuits related to last week's terrorist hijackings. He would bar punitive damages and consolidate all lawsuits into a single federal court, the U.S. District Court for the southern district of New York.

The government would also pick up whatever it would cost to compensate victims for damages ultimately exceeding the limits of the airlines' insurance policies.

Advertiser wire services contributed to this report.

Michele Kayal can be reached at mkayal@honoluluadvertiser.com