Friday, June 12, 2009

Bleak future for American Airlines Industry

Economic recession has hit the airlines industry of the U.S. pretty badly. Due to poor passenger turnover, air lines are now shedding off jobs to survive the recession. In the latest jobloss case, American Airlines, one of the top Airlines of the U.S. will eliminate 1600 jobs. On the other hand, Delta Airlines Inc., another major American Airlines is going to reduce its employees’ salary and will reassess its “staffing needs.” The company ordered its 400 flight attendants to take leaves or they would be laid off. Bloomberg reports:

Delta, the world’s largest airline, will slash available seats as much as 4 percentage points more than planned, for a cutback of 10 percent from 2008 levels, Chief Executive Officer Richard Anderson told employees. American, the second-biggest carrier, said it would shrink flying by 1 percentage point more than projected, to 7.5 percent.

Due to recession, number of people traveling by plane dropped significantly. Moreover, many business executives also stopped traveling as companies are trying to reduce their expenses. In order to attract customers, airlines are reducing air fares unless there is a major change in the country’s economic outlook there would be no major change in the business.


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