The pool of airline industry jobs continues to shrink as the economic recession takes hold and air carriers constrict capacity on both domestic and international networks. To add insult to the injury already being inflicted on the workforce, several of the nation’s largest carriers said last week they plan to continue grounding aircraft, slash schedules and cut jobs in response to falling passenger demand in a contracting global economy.

Delta Air Lines, for example, announced last week that it will trim international capacity by 10 percent this year. It will pare transatlantic flights and transpacific service by as much as 13 percent and 14 percent, respectively, this year. The reductions, which follow previously announced plans to reduce system-wide capacity in 2009 by six percent to eight percent, will lead the U.S. air carrier to seek additional staff cuts. The workforce reduction is in addition to the nearly 7,000 Delta employees who took voluntary buyouts over the past year two years.

In February Delta said more than 2,100 employees had signed up to take the recession-induced buyouts, exceeding the goal of 2,000 or about 2.8 percent of employees. In 2008, Delta cut more than 4,000 workers through voluntary exit packages. A month ago, the chief executive officer of Delta gave a bleak assessment of demand for air travel as companies reduced business travel and trips to far flung vacation spots were cancelled. In a recorded message to employees, CEO Richard Anderson did not specifically say the world's biggest carrier planned to cut more jobs or capacity than previously announced, though he did suggest the erosion in demand that the airline has seen has been very difficult.

"Passengers, our customers, are not buying tickets at rates they were buying tickets a year ago," Anderson said. "Obviously, we wish we didn't have to decrease our capacity, but we cannot fly our airplanes around at low load factors." Anderson said that Delta needed to right-size the airline based on customer demand. As demand shrinks, so will Delta’s payroll roster.

Meanwhile, poor international demand has forced United Airlines to reduce overseas capacity by nearly 15 percent this quarter and 5.5 percent for the year, said Kathryn Mikells, United’s chief financial officer. February traffic for Pacific routes was down 25 percent from the year earlier, with first-class and business-class declining even greater. United expects its overall capacity to fall 7.5 percent for 2009, with a 12 percent reduction in the current quarter. Although Mikells did not disclose any staff reductions, such announcements are expected to follow in the coming months.

AMR Corp. said it would cut 6.5 percent from its consolidated seat capacity for the year, with American Airlines chopping out nine percent from its domestic capacity and 2.5 percent from international. No immediate word on ‘pink slips’.

The situation at Delta, United and American is not atypical of the industry as a whole. The International Air Transport Association (IATA) says international scheduled traffic results show a deepening year-on-year demand slump, with demand falling by 5.6 percent in January 2009 compared to the same month in 2008. It is a full percentage point worse than the 4.6% year-on-year drop recorded in December. The January fall in demand is the fifth consecutive month of contraction.

The 5.6 percent drop in passenger demand outpaced capacity cuts of two percent driving the load factor to 72.8 percent - 2.8 percent below what was recorded for January 2008.

“Alarm bells are ringing everywhere. Aside from the Middle East carriers, passenger demand is falling in all regions. The industry is in a global crisis and we have not yet seen the bottom,” says Giovanni Bisignani, IATA’s director general and CEO.

Asian carriers led the decline in passenger demand with an 8.4 percent year-on-year drop in January. North American air carriers posted the second largest passenger decline at 6.2% led by a decline in transpacific travel. In response, carriers withdrew 2.6 percent of their international capacity, clawing back some of the expansion of 2008. European carriers offset a 5.7 percent decline in demand with a 3.6 percent decrease in capacity.

U.S. scheduled passenger airlines employed 6.7 percent fewer workers in December 2008 than in December 2007, the sixth consecutive decrease in full-time employee levels for the scheduled passenger carriers from the same month of the previous year. The December total of 391,918 for the scheduled passenger carriers was the largest year-to-year decrease since December 2003, said the U.S. Department of Transportation's Bureau of Transportation Statistics (BTS).

All the network airlines decreased employment from December 2007 to December 2008 as did low-cost carriers AirTran Airways and Frontier Airlines. Regional carriers American Eagle, SkyWest, ExpressJet Airlines, Comair, Horizon Air, Mesa Airlines, Executive Airlines, and PSA Airlines also reported reduced employment levels compared to last year.

Scheduled passenger airlines include network, low-cost, regional and other airlines. Many regional carriers were not required to report employment numbers before 2004, so year-to-year comparisons involving regional carriers, or the total industry, are not available for the years before 2004. The seven network carriers employed 264,744 in December, 67.6 percent of the passenger airline total, while low-cost carriers employed 16.0 percent and regional carriers employed 14.8 percent.

American Airlines employed the most workers in December among the network carriers, Seven of the top 10 employers in the industry are network carriers. Southwest Airlines employed the most among low-cost carriers, and American Eagle employed the most among regional carriers.

Employment at the group of seven network carriers decreased 6.3 percent in December 2008 compared to December 2007, the fourth monthly decrease from the same month of the previous year after 16 consecutive months of year-over-year growth. Prior to an increase in May 2007, the network group had reduced employment from the previous year every month since September 2001.

Within the group, all network carriers decreased their rosters from December 2007 to December 2008: United Airlines, 12.7 percent; Northwest Airlines, 6.9 percent; Delta Air Lines; 6.2 percent, American, 4.3 percent; Continental Airlines, 4.2 percent; US Airways, 4.0 percent; and Alaska Airlines, 3.0 percent. Employment at four network carriers declined during the four years from December 2004 to December 2008. The biggest percentage decline was at Northwest, down 27.7 percent, a reduction of 10,715 jobs, followed by United at 20.7 percent.

The number of workers at Air Tran and Frontier declined 3.3 percent in December 2008 from December 2007, but five other low-cost carriers reported year-to-year employment increases: Virgin America, 71.3 percent; Allegiant Airlines, 14.2 percent; Southwest, 3.3 percent; Spirit Airlines, 2.8 percent and JetBlue Airways, 2.3 percent.

Regional carrier employment was down 5.2 percent in December 2008 compared to December 2007. ExpressJet, down 32.1 percent, and PSA, down 27.4 percent, reported the largest decreases in the regional group. Compass Airlines, up 114.4 percent, and Mesaba Airlines, up 28.6 percent, and reported the largest increases in the group as Northwest recovers from its bankruptcy.

There recently was a bit of good news for those who oppose the outsourcing of US- based airline jobs overseas as U.S. unemployment figures reach alarming levels.

United Airlines said it was shifting 165 customer relations jobs -- previously outsourced to an outside contractor in India –back to the United States. The new US-based jobs will be filled by United workers who will be replaced by new hires.

The move runs counter to the trend among U.S. companies of sending jobs overseas to save money. United now believes US-based workers with a greater understanding of the air carrier’s policies will better handle customer complaints and compliments provided by email and letters. At the end of April, the customer relations toll-free phone number will be disconnected as United believes written queries can be handled more efficiently than phone interactions. Customers who dial 1-800-UNITED-1 will be directed to put service concerns into writing.

UAL, which cut 7,000 jobs last year and plans to cut 1,000 more this year, said the customer relations work outsourced to India a few years ago and performed by third-party contractors will now be handled by United workers at two of the three remaining reservation centers on U.S. soil, in Honolulu and Chicago. At one time, United had 17 domestic reservations centers. Outside vendors continues to take reservations outside the U.S., including Manila.

An existing United customer relations shop in Mexico will remain in operation to handle the Latin American region of the world. The Honolulu site will handle the Western U.S. and Asia while the Chicago customer relations center will be responsible for Europe and the Eastern USA. The three-way work split is dictated by language and time zone issues.