Discount carrier AirTran Airways said Wednesday that it’s seeking to cut its overall employee pay by about 10 percent to help offset soaring fuel prices.
“Our plan is to temporarily reduce pay rates for six months commencing with the start of the August pay period, and we will then review the situation again,” CEO Bob Fornaro told employees in a memo. “I must be clear that while we are starting with a conservative reduction as we monitor oil prices and industry conditions, we may need to do more in the future.”
Fornaro said cost-saving efforts the Orlando, Fla.-based carrier has already implemented — reducing capacity by 15 percent, cutting costs, raising $150 million in cash by selling stock, capping a portion of the company’s fuel exposure with hedges and raising ticket prices and fees — have not been enough to deal with the impact of oil prices that have doubled in the last year to more than $140 a barrel.
Pay cuts for union covered employees must be negotiated.
AirTran’s hub is in Atlanta.
Originally published by Bloomberg, AP and staff reports.
(c) 2008 Tulsa World. Provided by ProQuest Information and Learning. All rights Reserved.
Comments