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Alaska Air to Eliminate 900 Jobs

September 10, 2004|From Reuters

Alaska Air Group Inc., the parent of Alaska Airlines, said Thursday that it would reduce its payroll by about 8% and outsource some operations to cut expenses in the face of competition from low-cost carriers.

Alaska Air plans to cut about 900 of 11,000 jobs. Those reductions include some management positions that were announced in August. The company hopes the measures save it between $30 million and $35 million a year.

"Unfortunately, changes in the competitive and economic climate have continued at a rapid pace, requiring us to take even stronger measures to secure our future," Chief Executive Bill Ayer said in a statement.

High oil prices also have slammed airlines, which have been struggling from the economic impact of the war in Iraq and the 9/11 terrorist attacks.

Alaska Air said it would immediately close an Oakland maintenance facility where 340 people were employed. The company said it would contract out the work performed in Oakland to aircraft services firms such as Goodrich Aviation Technical Services of Everett, Wash., and AAR Aircraft Services of Oklahoma City. Alaska Air already uses the two companies for about 60% of its heavy maintenance work.

"The sobering reality is that large-scale maintenance providers can give us the same excellent quality at a lower cost," Ayer said.

The company said it also would close some facilities for ground support and maintenance operations, as well as three ticket offices and a four-person office that scheduled pilots.

Shares of Alaska Air rose 18 cents to $23.71 on the New York Stock Exchange.

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