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American Morning

America's New War: More Job Cuts Today in Airline Industry

Aired September 26, 2001 - 10:31   ET


PAULA ZAHN, CNN ANCHOR: More job cuts today in the airline industry. Delta Airlines is the latest to layoff workers. A detailed announcement is expected next hour. Among the big carriers: AMR -- that includes, American, American Eagle and TWA, cut 20,000 jobs. United has laid off 20,000; Continental, 12,000; U.S. Airways, 11,000. Northwest has cut 10,000. Overseas, British Airways has laid off 7,000 workers; SwissAir, 3,000; and U.S.-based America West airlines has laid off 2,000.

So, in all, we're talking about 100,000 layoffs being announced in airline or airline-related industries. In many cases, they come without severance or other benefits. The cuts are affecting airline workers across the country. Let's talk about that now with three of our correspondents.

Ed Lavandera is at Dallas-Ft. Worth Airport, Bill Delaney is at Boston Logan Airport, and Kathleen Koch is at Reagan National Airport, near Washington.

This time, just to change things, Kathleen, we're going to start with you. I butchered your name, so you get to go first.

KATHLEEN KOCH, CNN CORRESPONDENT: Well, Paula, as you can see behind me, this airport is completely empty. There has really been an eerie silence here for the last few weeks. Not a single passenger. Not a taxi. The doors of this billion-dollar terminal are locked shut.

Let's take a look over at the runway, where normally, this time a day, you would have dozens of planes stacked up, waiting to takeoff. This airport handles about 300,000 flights every year. As you can see, Not a plane, not an or aircraft in sight.

Paula, this is having a huge impact on the local economy. Some 4,000 of the airport's 10,000 employees have been laid off. Just across from here in Crystal City, there are numerous hotels. They are virtually empty. Restaurants, taxicabs, car rental companies, shops are all suffering.

Now this airport generally handles about 42,000 passengers every day. Now that quantity pumps about $5 billion a year into this local economy. So all of that for now has ended.

Will this airport open? No one knows. If it does, perhaps they're saying flights will only be allowed to take off to the south, away from the city, take off and land. Another change that also they, Paula, might make is a testing ground for the tightest airline security in the country -- Paula.

ZAHN: OK, thank you so much, Kathleen.

Time to check with colleague, Ed.

Ed, has business picked up at all this morning?

ED LAVANDERA, CNN CORRESPONDENT: Well, things starting to slowly pick up. It's kind of Inevitable, as we start talking on camera that crowds here kind of thin out a little bit. But the Dallas-Ft. Worth area is home to two of the major airlines in the country, American Airlines and Southwest Airlines.

The CEO of American Airlines, Don Carty, describes this situation the airline is in as the darkest period in American Airlines 75-year history. He says the airline is in a state of emergency. For the rest of the year, the CEO, Don Carty, has given up his salary and compensation to help the airline. As you mentioned, 20,000 layoffs have been announced, and that does not include compensation packages or early retirement. American Airlines has also reduced its flight schedule by 20 percent. So the airline says that the company survival depends on dramatic changes.

As far as Southwest Airlines, it is the only airline never had layoffs, and they say that they do not anticipate any layoffs here in the weeks ahead. They say they have $1.4 billion in cash reserves, so that will help the airline through this problem. They've also instituted a plan, where Southwest Airlines employees are volunteering, giving back money to the airline from their paychecks. They did this back in 1991 during the Gulf War because oil prices have climbed so high, and back then, they raised several hundred thousand dollars.

But as to right now, Southwest Airlines acknowledges that it is losing money, but they won't know for sure until next month. But again, the airline has no plans for layoffs at this point. But if it does get to that point, it will be huge news for an airline that is extremely popular in this state and this region.

Paula, back to you.

ZAHN: Ed, thanks, I don't know, with all the security in place, have you been able to move beyond the check-in point there. But I got to believe that all the retail-oriented businesses at the airport where you are stationed is way off. I mean, I guess we all who travel a lot remember airports by the food courts, and they extensive food courts there and retail operations.

LAVANDERA: Yes, and that's kind of the point. A lot of the stuff trickles down. We're not allowed past the security point. And then another thing to mention we will take our crew, for example. We're used to when we travel we check with the skycaps outside. And quite honestly, they get a nice tip when we come through the airport. That money's not there anymore. So you have to wonder, as things kind of trickle down, what will be the long-term effects of all this -- Paula.

PAULA ZAHN, CNN ANCHOR: OK, Ed, thanks so much. Let's got back to Bill Delaney who continues to stand by at Boston's Logan Airport.

Bill, You told story at the end of your last report about a friend of yours very recently actually getting through security with what a bunch of change in pocket, and what else did he have in there that should have been detected?

BILL DELANEY, CNN CORRESPONDENT: Yes, this was actually a minister from Boston, who's a friend of mine. He came through Logan Airport over the weekend with a cell phone, and a bunch of keys and change, walked right through a metal detector, metal detector didn't go off, and nobody tried to stop him. He was very bothered by that, and it's the sort of thing that bothers people about flying in general in the New England region, and we anticipate a heck of an economic wallop from all of that.

Here at Logan Airport, it's just quieter than it's been in memory. Still, a significant drop in travel. One indicator, Paula, for example, cab drivers used to flow in here from Boston, and they pretty much just stopped long enough to pick up a passenger and were out again. Cab drivers now having to wait as much as two hours for a passenger out of Logan Airport. The popular shuttle flights between Boston, Washington and Logan down as much as 75 percent. Used to fly every hour, now flying often just five times a day.

Hotels down. I'm actually in the parking lot here outside the hotel of the luxurious Hyatt Regency Hotel. Well, they're occupancy is down by a third. Some luxury hotels in Boston reporting occupancy down by as much as 70 percent.

Throughout New England, of course, this is the leaf season. A big wallop expected to tourism. Not as many people anticipated coming in, and that's a billion-dollar industry.

Back to you, Paula. Thanks very much.

ZAHN: Bill, earlier this morning, you pointed out a blistering piece in "The Boston Globe," focusing in on some of what they describe as lax security at the airport. I don't know how many airport employees you've had a chance to talk to, but they have to be extremely sensitive, not only about the criticism, but about the scrutiny.

You know what, I don't think Bill was able to hear that, because he's able to answer just about any question. We'll be checking with Bill a little bit later.