CEO Hints At Job Cuts, Other Measures
Last week's $50 hike in
airfares looks like it's going to stick. Following in the steps of
United and Continental, this week Northwest Airlines also increased
fares across the board.
As ANN reported, United and
Continental announced their fare increases March 14. Trips under
500 miles will cost fliers about $10 more round-trip, with journeys
longer than 1,500 miles costing as much as $50 more, especially on
Like those carriers before it, Northwest pointed the finger at
record high prices for fuel, and a slumping economy.
"Airfares have to go up, and our passengers will need to pay
more. Airlines simply cannot absorb these cost increases,"
Northwest CEO Doug Steenland told employees, reports The Associated
Furthermore, the worst may be yet to come... for travelers, and
airline employees. Like other carriers, Northwest has seen its
fortunates plummet in recent weeks due to the above economic
travails; on Monday, Northwest stock prices dropped 82 cents,
closing at $8.69... less than half their value one month ago.
Airlines are becoming increasingly desperate to stop the
bleeding... and in his message, Steenland strongly hinted his
airline may have to take drastic measures, though he stopped short
of mentioning job cuts.
"First we have to tighten our belt. We need to find ways to
preserve cash by reducing capital expenditures and operating
costs," he said. "Fortunately, we have over $3 billion of cash on
A Northwest spokeswoman declined to comment further... but it's
likely the CEO's underlying message was lost on no one.