Impending Doom...

April was a bad month for the airline industry, in that we saw more shutdowns in that month than ever recorded in airline history.

At AMR's annual meeting two weeks ago, it was announced they were going retire 40-45 mainline and 35-40 regional aircraft during the rest of 2008. As has been long anticipated, A300's will be returned to lessors as the leases start to expire this month. The remainder of the mainline aircraft will no doubt be MD80's. Overall, capacity will be down about 11-12% from 2007. Cuts announced so far include SJU dropping from 38 to 18 mainline departures, and pulling Eagle from 55 to 35 departures. Other cuts include long haul flying out of ORD to EZE and HNL.

Yesterday, rumors started flying out of United's World Headquarters faster than jets out of Miramar MCAS... UA had planned to ground 30 of their smaller 737-500's, but has apparently decided to increase that to include the 64 larger 737-300's they also operate. Now, considering UA operates 460 aircraft, 94 is simply a staggering number, but desperate times call for desperate measures. In UA's case, it is between 15% and 17% of their current system capacity. Also on the chopping block... between 7 and 9 of their 30 747-400's, which are mostly based on the west coast and operate across the Pacific. The formal announcement is expected tomorrow, at which time it's also expected that John Tague will be named as Glenn Tilton's successor.

And last week, the carnage also stacked up among some smaller US carriers.

German freight giant DHL announced they were no longer going to use ABX and Astar Aviation to fly for them in North America, and would instead have UPS provide lift. ABX was operating 39 aircraft and Astar about 35. Somewhat ironic, in that DHL had spent a lot of time and effort setting up Astar as a proxy carrier, which was long contested by both UPS and FDX. Something else this may signal -- softness at UPS.

Meanwhile, unconventional and privately held Spirit informed its unions they were issuing WARN letters to 60% of their flight attendants, and 45% of their pilots... They made no specific announcement as to the number of flights being reduced, but they're closing several crew bases, including two that just opened last year. Conventional wisdom is it's pretty serious, but without the transparency that comes with SEC filings, it's only a guess as to how bad things really are...


Obviously, when airplanes get grounded, jobs obviously go with them.

AA has only announced 400 layoffs in SJU, but there are obviously going to be more to come. As I said, they've kept their plans a little more close to the vest, but if you assume around 100 employees per aircraft, that's 4500 employees at a minimum.

UA has hinted at up to 25% of their current employees. That could be up to 13,000 employees. Again, staggering...

ABX and Astar? Between 6000 and 8000, the brunt of those being ground employees at their shared Wilmington, OH sortation hub.

NK expects up to 448 flight attendants and 242 pilots.


By the end of the week, the announced cuts could exceed 30,000 jobs. But I don't think that's going to be anywhere close to what the summer holds in store for us...

[updated 6/8 to correct gross overestimate of current UAL employees... it's 55,000 and not 80,000!]