Alaska Air Plans to Cut Jobs

The company will also reduce capacity by 8% in the coming months, partly because of high fuel prices.
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Alaska Air (ALK) - Get Report says it will trim capacity by 8% in the coming months due to high fuel prices, a slowing economy and tough West Coast competition.

The capacity cuts will lead to 15% fewer departures and a work force reduction of 9% to 10%, the carrier said. That means 850 to 1,000 positions, including flight crews, mechanics and agents between November and early 2009. In August, the company shed 80 management positions.

"The one-two punch of record oil prices and a softening economy, on top of increased competition, has burdened Alaska Air Group with a $50 million loss on an adjusted basis for the first half of this year," said CEO Bill Ayer, in a prepared statement.

In July, the carrier reported a $14.1 million second-quarter loss, after special items, and said it would reduce 2009 mainline capacity by 5% to 10%.

Changes announced Friday will include canceling low-demand Saturday and holiday flights, minimal flight reductions in high-frequency Seattle-California markets, smaller aircraft on some Portland-Bay Area flights and the end of three seasonal San Francisco-Mexico routes.

Alaska will add several new routes, including Seattle-Minneapolis on Oct. 26, Seattle-Kona on Nov. 17 and seasonal Anchorage-Maui service. It also plans to raise fares, increase fees, add a second-bag charge and reduce spending.

Sister carrier Horizon Air plans a 20% fourth-quarter capacity reduction.

Alaska shares fell 2.4% Friday to $23.19.