One in Five Execs Hits the Bricks in Survival Move

America West Airlines has begun building the streamlined and restructured management team promised by a previously-announced plan to reduce costs, in an effort to protect the airline's financial condition.

Approximately 250 management, professional and administrative positions, primarily at the company's Tempe (AZ) headquarters; and other Phoenix-area locations, are being eliminated. Executive positions, those at the director level and above, have been reduced by approximately 20 percent and are now 30 percent below early-2001 levels. Included in this reduction are five senior officer positions.

"The airline industry remains in an unprecedented financial crisis, forcing airlines to continue to be creative about serving customers more efficiently and with less overhead," said Douglas Parker, chairman, president and chief executive officer. "Unfortunately, that requires making very difficult decisions. None are more difficult and painful than those involving fellow employees."

In a letter to employees dated March 24, 2003, Parker said the airline set a goal of $100 million in cost reductions "in order to maintain sufficient liquidity in this uncertain environment." Included in that goal were reductions in:

• operating expenses;
• business partner and vendor fees;
• and management, professional and administrative payroll costs.

Expenditures deemed necessary and critical to customer service and to the safe operation of the airline were not impacted.

"Our goal has solely been to reduce overhead costs, providing this does not sacrifice customer service or safety," added Parker. "We remain hopeful that we can achieve our cost-reduction goals without layoffs in other workgroups, and without asking employees to take pay cuts."

Some Positions Eliminated Altogether; Others Consolidated

Lonnie Bane, senior vice president of human resources, and Jack Richards, president and chief executive officer of America West subsidiary The Leisure Company, have announced their resignation from America West. Neither position will be directly replaced. Human resources will now report to Jeffrey McClelland, executive vice president and chief operating officer. The Leisure Company will continue to report to Scott Kirby, executive vice president of sales and marketing.

Additionally, Greg Garger, vice president of labor relations, Patrick Sakole, vice president of safety, and Mark West, vice president of purchasing and fuel administration, have resigned from the company.

Garger's responsibilities will be assumed by Shirley Kaufman, vice president of employee relations and human resources, who will report to McClelland; Sakole's responsibilities will remain under McClelland, who now also becomes America West's chief safety officer; and West's responsibilities are being consolidated under Michael Carreon, vice president and controller.

"It is with sadness that we say farewell to these five outstanding and very capable leaders, all of whom have made tremendous contributions to America West, as well as to every employee impacted by this action," Parker said. "We are grateful for their service and for the excellent job they have done. Each will be missed."

FMI: www.americawest.com