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December 18, 2007
SAN FRANCISCO - U.S. airlines added more jobs in October, marking the ninth straight month of year-over-year increases, as carriers staffed up to meet heavier traffic levels, government data showed Tuesday.
Carriers for the month employed 417,554 workers, measured on a full-time equivalent basis, which counts two part-time employees as one full-time staffer. That level is the highest in any month since July 2005 and is 3.5% greater than the October 2006 figure, the Bureau of Labor Statistics said.
After years of cutbacks while major carriers sought to pare costs to offset sluggish demand, the newly profitable industry expanded to take advantage of increased travel, particularly on new international routes. For the first nine months of 2007, airlines added to capacity, making 2.8% more available seat miles, while traffic rose 4%.
More recently, however, several airline executives have warned that growth rates are likely to slow next year to counter higher fuel costs.
Delta Air Lines Inc. (DAL), which exited a 19-month bankruptcy restructuring in April, made the biggest increase among network carriers for October. Its staff levels rose 8.8% from a year earlier, to 48,416 employees.
American Airlines, the largest carrier by employment, showed a staffing gain to 73,259 employees, up 0.7%. American, operated by AMR Corp. (AMR), said Monday it planned to recall or hire up to 250 maintenance employees to prepare for increased workloads next year. It previously recalled flight attendants and pilots, with hiring among pilots mostly designed to replace departing staff.
United Airlines, operated by UAL Corp. (UAUA), saw its payrolls edge up just 0.03% to 52,373 full-time equivalents. That, however, was the first monthly increase for the Chicago-based carrier since September 2001.
In general, network carriers excluding US Airways Group Inc. (LCC) increased employment levels 2.1%. Northwest Airlines Corp.'s (NWA) job rolls shrank, however, by 3.4%.
Helped by strong demand among travelers, particularly on the newly launched overseas routes, and lowered costs, the airline industry has been improving profit figures. On Monday, the Bureau of Transportation Statistics said the 20 largest U.S. airlines reported an operating-profit margin of 8.2% in the third quarter, the first time since 2000 that airlines have posted six straight profitable quarters.
The industry's short-lived good times may be giving way to familiar struggles for increased profit. Late last week, the International Air Transport Association predicted that among global carriers North American airlines would see the largest fall in profitability in 2008 as earnings slip to $2.2 billion from $2.7 billion this year.
"With 35% of the fleet over 25 years old, the impact of high fuel prices is greater than in other regions," said the trade group in a statement. "Moreover, the region is at the center of the credit crunch."
Meanwhile, changes at the national level may limit the need for some new hires. Last week, President Bush signed a law that raised the mandatory retirement age for pilots to 65 from 60, a move applauded by JetBlue Airways Corp. (JBLU) and others.
U.S. Airways and merger partner America West Airlines, which are now operating under one flight certificate and so are seen as a single airline in the eyes of aviation regulators, increased combined employment 3.8% to 32,880 in the last year, or about 801 jobs more than when the two carriers started merger procedures in October 2005.
Frontier Airlines (FRNT) led increases in the low-cost-carrier category, employing 15.1% more workers in October, with 5,194 employees. AirTran (AAI), increased employment levels 9.7% to 8,104.
(END) Dow Jones Newswires
12-18-07 1727ET
Copyright (c) 2007 Dow Jones & Company, Inc.
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