Northwest Cuts 10,000 Jobs; Bush Signs $15 Billion Aid Package

After days of speculation, Northwest Airlines announced Friday it will cut 10,000 jobs and reduce service by 20 percent, becoming the latest in a string of aviation companies fighting for survival in the aftermath of last week's terrorist attacks.

Meanwhile, Congress passed and Bush signed into law a $15 billion relief package aimed at helping the airline industry.

The 10,000 job cuts represent 19 percent of Northwest's workforce. Before the announcement, Northwest, the fourth-largest U.S. carrier, had about 53,000 employees, including 21,000 in Minnesota. It's one of the state's largest employers.

One analyst estimated this week that Northwest was spending $22 million a day from reserves. The company's stock has lost 51 percent of its value since the attack.

All eyes are now on Delta Air Lines, the No. 3 U.S. commercial carrier. Its president said Thursday in a recorded telephone message to employees that the company was faced with "absolutely no alternative" to cutting jobs because of the drop in demand for air travel.

The cuts will be announced next week, Frederick W. Reid, Delta's president and chief operating officer, said. Delta has about 80,000 employees, most based at the company's hubs in Atlanta, Cincinnati, Dallas-Fort Worth, and Salt Lake City.

About 100,000 jobs cuts have been announced so far by the ten biggest U.S. carriers.

Airline job cuts also spread to Europe, with Europe's largest airline, British Airways,  announcing sharp cutbacks in jobs and flights.

No. 1 U.S. carrier American Airlines, No. 2 United Airlines and aeronautics giant Boeing Co. have already announced layoffs of up to 75,000. 

The attacks in New York and Washington have led to sharply reduced demand for air travel and a need for costly increased security measures. All major carriers have been running a 20 percent reduced flight schedule since the attacks.

American put an end to days of rumors on Wednesday by announcing that it would lay off at least 20,000 employees. United also came out on Wednesday with plans to cut about 20,000 jobs in the wake of the attacks. The cuts amount to about 20 percent of its work force of 100,000 people.

And late Tuesday, Boeing announced it was laying off up to 30,000 employees by the end of next year. 

Federal Aid Package

Some relief is on its way, however, as Bush signed a $15 billion package on Saturday aimed at helping the airline industry.

The bill sent to the President was close to what the airlines had been seeking during a week of intense lobbying on Capitol Hill.

The deal between the House and the Senate came on Thursday after President Bush, in an address to Congress and the nation on the terrorist strikes, promised that "we will come together to promote stability and keep our airlines flying with direct assistance during this emergency.''

The Senate approved the package with a 96-1 vote on Friday; Sen. Peter Fitzgerald, R-Ill., cast the dissenting vote. The House followed suit later in the day, voting 356-54 to send the bill to President Bush for his signature.

The package provides $5 billion in direct aid, the amount the airlines said they would lose by the end of the month as a result of the government-ordered grounding of flights following the terrorist hijackings of four jetliners, and the sharp drop in business since service was restored.

It also offers $10 billion in loan guarantees to airlines that face fewer customers, sharp increases in insurance premiums and rising costs for security.

The government commits $3 billion to help with those rising security costs, with the money coming out of the $40 billion emergency package passed last week. Sen. Max Cleland, D-Ga., said this was crucial to bringing back customers. ``Money won't help without confidence-building'' safety measures, he said.

There were also limited liability protections for airlines, of special concern to United and American, whose planes were hijacked by the terrorists in their suicide missions. The government will cover the costs for airlines' insurance preimums for 180 days if the airlines cannot afford coverage, and will assume liability in excess of each carrier's coverage.  

Under the law, the attorney general will appoint a "special master" to consider the claims of victims on the ground and make compensation available. The airlines are still responsible for the legal claims of passengers on the four hijacked planes. Also, some airlines get war risk insurance for domestic flights. Previously, only international routes had such coverage.

Reuters and the Associated Press contributed to this report.