Northwest to cut 2,500 jobs

Northwest Airlines is to cut 2,500 jobs because of the "unprecedented" rise in the cost of jet fuel. The cuts amount to 8% of Northwest's total workforce and will hit both frontline staff and management.

The airline's management said that it will offer early-out and leave programmes to attempt to reduce as many jobs as possible through voluntary means. Furloughs will be used only if the carrier does not hit its job reduction target.

Northwest will be introducing two fees and raising a third in the hopes of increasing revenue by $250 million to $300 million a year, as per the information available.

A $15 fee for a customer's first checked bag, which American created several weeks ago, is now being matched by Northwest. Frequent-flier elite passengers and full-fare coach passengers are exempt from this new fee.

"Our fuel costs have more than doubled in the past year," Northwest CEO Doug Steenland said in a written statement. "In order to manage through this unprecedented fuel challenge, we have to take action to both control costs and increase our revenue."

"These reductions are the direct result of our extraordinary fuel costs and the necessary actions we must take to right-size our airline and eliminate unprofitable flying," said Steenland.

Delta Air Lines and Northwest Airlines have both recorded multi-billion dollar losses for the first three months of 2008, hit by crippling fuel costs. The firms agreed to merge in a $5bn (£2.5bn) deal last week as a way to cut costs and boost revenue as oil prices hover near $120 a barrel.