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Midwest Airlines to Cut 1,200 Positions: Steps to Restructure Company

July 15, 2008

By Tom Daykin, Milwaukee Journal Sentinel

Jul. 15–Tina Swenson was 20 when she started working at Midwest Airlines as a ticket agent before eventually taking to the skies as a flight attendant.

But, after 16 years at the airline, Swenson on Monday was looking at the “help wanted” ads. She may be among the 1,200 employees at Midwest Air Group Inc. who will be losing their jobs by mid-September.

“Jobs are hard to find,” said Swenson, whose boyfriend also works at Oak Creek-based Midwest Air, which operates Midwest Airlines and the Midwest Connect regional carrier.

That’s especially true for airline positions. On Monday, Midwest became the latest carrier to announce major job cuts, as soaring prices for jet fuel, coupled with a drop in air travel, puts airlines in a squeeze. The industry’s response has been to cut unprofitable routes, and that means fewer pilots, flight attendants, ground crews, mechanics and other employees.

The Midwest Air job cuts, encompassing around 40% of the company’s 3,000-plus work force, come as no surprise.

In June, the company said it was phasing out a dozen MD-80 jets used for charter service as well as regular passenger service to leisure destinations and West Coast cities. The MD-80s, which make up roughly one-third of the Midwest Airlines fleet, use a lot more fuel than the carrier’s 25 Boeing 717 jets.

Midwest Air executives later said in meetings with employees that they were planning to ground five of the Boeing 717s, according to union officials. That would cut the entire fleet by about half.

The service cuts will be announced once Midwest Air publishes its fall schedule. That’s expected within the next few weeks, spokesman Michael Brophy said.

Nonstop flights on Midwest Airlines from Milwaukee to Seattle, San Francisco, Los Angeles and San Diego will be gone, said Vaughn Cordle, who operates AirlineForecasts LLC, an Arlington, Va.-based consulting firm.

If Midwest Airlines has just 20 Boeing 717 jets, it will likely focus many of its Milwaukee flights on large East Coast destinations, such as Boston, New York, Philadelphia and Washington, said Michael Boyd, who operates Boyd Group Inc., an aviation consulting firm in Evergreen, Colo.

“That’s where the people are,” he said.

Boyd also expects Orlando and other Florida destinations to remain important markets for the carrier.

The latest job cuts come on top of 380 positions eliminated this spring when Midwest Air hired Utah-based SkyWest Airlines Inc. to handle all Midwest Connect flights, a move designed to save money.

Midwest Air is cutting service and taking other steps to restructure the company and avoid Chapter 11 bankruptcy. The company also is seeking steep wage cuts from its union flight crews, but those proposals have run into opposition from the pilots and flight attendants.

In a memo to employees, Chairman and CEO Timothy Hoeksema says the work force reduction, while painful, “is necessary to help preserve the future of our company.”

“If we do not make these reductions, we risk failing as a business, all employees will lose their jobs and travelers will have one less choice of air carriers,” Hoeksema said.

Paul Sweet has been a flight instructor and pilot for 15 years, including the past eight years at Midwest Airlines. He expects to lose his job and is considering a switch in careers. Sweet is married and the father of three children, all under the age of five.

“It’s a hardship on families,” Sweet said. “The airline industry needs to figure out how to stay in business without passing all of the costs on to the employees.”

Joey Krajewski has been a Midwest Airlines flight attendant for 18 years. She might have enough seniority to avoid losing her job but is worried about the pay cuts of 34% to 56% that the company is seeking from flight attendants.

Swenson, with just five years as a flight attendant, could be getting a layoff notice. She switched from customer service supervisor to flight attendant and found a job that she loves.

“I hope I can continue doing it,” Swenson said.

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Copyright (c) 2008, Milwaukee Journal Sentinel

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