AirTran plans to cut employees' pay

ATLANTA — AirTran Airways plans to cut employee pay by 5 percent to 15 percent, the company said Wednesday.

Orlando-based AirTran, which has its largest hub in Atlanta, said its 16 officers will take 15 percent pay cuts, while most employees will see pay cuts of 5 percent to 8 percent.

Under the company's plan, higher-paid employees such as more senior pilots would see higher pay cuts, according to Kevin Healy, AirTran's senior vice president of marketing and planning.

But about 48 percent of the company's employees are represented by unions — including pilots, flight attendants, mechanics, stock clerks and dispatchers — and the company must negotiate with the unions on the pay cuts.

The company's objective is to cut pay for all employees, "but there's a process we have to go through for the union groups," Healy said.

Association of Flight Attendants spokeswoman Corey Caldwell said AirTran's move is not surprising in the current economic climate.

"They can't impose these concessions on flight attendants without their consent," Caldwell said. "We'll just continue to work with management on trying to come up with a solution that is fair and equitable."

Pending approvals, AirTran expects the pay cuts to go into effect in August and aims to cut its overall payroll by 10 percent for six months. The company, which has about 8,900 employees, said it would then "review the situation."

In a letter to employees, AirTran Chief Executive Bob Fornaro wrote: "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."

"This is an unfortunate but necessary step," Healy said. "This isn't something that is greeted warmly. Nobody wants to go through this, but they understand the business."

Employees at AirTran and other carriers took pay cuts after the Sept. 11, 2001, terrorist attacks. Back then, "we came up with very creative solutions on how to reduce expenses," Healy said. "We have a very entrepreneurial work group, and our crew members pretty much unilaterally look at the company like owners."

AirTran is also expected to announce furloughs of employees, but the company has not yet officially announced job cuts. The pilots union at AirTran said in a message to members that it expects roughly 180 furloughs, although the numbers have not yet been finalized.

AirTran had planned to increase its capacity by 10 percent, but is instead cutting it by 5 percent in September to address rising fuel costs. .

Fornaro wrote in the letter that the company would work with its vendors and business partners to "restructure our company for this high-oil-price world."

The company told employees it would reimburse all reductions if economic conditions "abruptly change," resulting in an annual operating profit this year.

AirTran's move to cut employee pay comes after other carriers have made similar moves to cut costs.

Atlanta-based Delta Air Lines is cutting more than 4,000 employees from its staff through voluntary leave and early retirement programs, although this month it increased pay for most of its employees by 3 percent.

Kelly Yamanouchi writes for The Atlanta Journal-Constitution.