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Monday, December 08, 2008

UAL Corp to Cut 1,200

The dismal economy has hit many industries very hard over the last year or so and folks in the airline industry are on the front lines once again. After so many years of restructuring and insolvency, UAL (the parent company o United Airlines) has announced that they will be eliminating 1,200 workers in an attempt to cut nearly 7,000 jobs through 2009. When the cuts were first announced late in November, UAL employed well over 55,000. After the projected cuts, UAL is expected to be able to run partial staff in order to meet current economic conditions head on.
Apparently after being battered by high fuel costs and persistent maintenance issues, the airline industry decided to downsize in order to stave off insolvency. It is unclear whether or not the current economic crisis will require UAL to make deeper cuts, but at the moment fuel prices (which are at their 1998 levels) can't be labeled the culprit, at least not yet. 
It will be interesting to see how the holiday travel season plays out for this industry. It is clear that a lot of people aren't traveling this year due to economic concerns as well as ticket prices. I suspect that more cuts will be on the way for the 09-10 calender year. 
Funny how much can change in a week...
Source: SupplyExec