Wednesday, July 23, 1997

TWA says it will cut about 1,000 jobs

By JIM SALTER / AP Business Writer

ST. LOUIS (AP) - Trans World Airlines announced Tuesday it will cut about 1,000 jobs - 4 percent of its work force - by the end of the year as the struggling carrier tries to reduce costs.

The airline said it will eliminate about 250 maintenance jobs at its overhaul base in Kansas City, 200 jobs at its domestic line maintenance stations, 200 jobs from airport operations and 225 reservations jobs.

TWA said the majority of the maintenance cuts will involve layoffs. The company laid off 260 of the Kansas City base's approximately 3,000 workers in June.

Analyst Ray Neidl of Furman Selz said the cuts in Kansas City were not surprising.

"The Kansas City maintenance base is a big money loser for the company," Neidl said. "TWA is trying to find every way possible to cut costs because they are very much on the margin in terms of their survivability."

Most of the other cuts will be made by eliminating positions that are already vacant, the St. Louis-based airline said.

After two trips to bankruptcy court in the 1990s, TWA seemed to regroup early last year and posted a second-quarter profit of $25.3 million. Then Flight 800 crashed last July.

The airline lost $285 million in 1996 and another $72 million in the first quarter of 1997.

TWA's second-quarter earnings are expected to be released within days, and Neidl expects another losing quarter.

The airline attributes the bulk of the job losses to having new aircraft that don't need as much maintenance. It said it would consolidate its 23 domestic line maintenance stations into 13.

"Today, TWA no longer has the oldest fleet among the major airlines," said William F. Compton, executive vice president of operations.

"We are taking delivery of more than $2 billion worth of brand new and recent-vintage used aircraft ... As these new aircraft with fewer scheduled maintenance requirements come to constitute a larger and larger portion of our fleet, we are required to adjust our staffing to closely reflect industry standards."

But machinists who are bearing the brunt of the cuts said the layoffs are the result of a poor business plan.

"I'm disgusted," said Keith Nelson, president of Local 1650 of the International Association of Machinists and Aerospace Workers in Kansas City. "It is incompetence. We have a management in place that cannot handle an airline of this size."

Nelson conceded that the new planes require less maintenance. But he said the company has gutted TWA programs that provided contract maintenance for the military and other airlines. "We have CEO in place that wants to ... eliminate maintenance," he said.

Line maintenance stations that are under review for closure include Boston, Washington National and Dulles, Philadelphia, Miami, Cleveland, Atlanta, Columbus, Cincinnati and Detroit.

"It's never easy to distribute furlough notices," Compton said. "However, a more efficient fleet is one of the keys to a profitable future for TWA, and sustainable profitability is the only real long-term guarantee of job security that any of us ever will have."

TWA's stock finished 43.8 cents higher at $6.62-1/2 on the American Stock Exchange Tuesday.