High-flying Utah economy is losing air

Delta move spurs SkyWest layoffs

Published: Friday, March 13 2009 12:00 a.m. MDT

A SkyWest Airlines employee loads baggage into a SkyWest aircraft at Salt Lake City International Airport.

Jeffrey D. Allred, Deseret News

St. George-based SkyWest Inc. announced Thursday that its subsidiary, SkyWest Airlines, will cut about 300 full-time jobs following a decision by Delta Air Lines to assume additional baggage-handling duties for flights at Salt Lake City International Airport. Companywide, SkyWest employs more than 10,000 workers, with nearly 3,000 in Salt Lake City, said Marissa Snow, manager of SkyWest corporate communications.

"We estimate that approximately 300 employees will have a change in status, meaning some will move from full to part time and we will be furloughing a significant number of employees," she told the Deseret News. The changes will take place May 15, she said.

Snow said many workers will be placed on a three-year furlough status, which will allow the company to recall them if there is a business need. Those employees will also be extended some travel and health benefits, she said.

The reductions will affect only ground-handling staff working on the B concourse at Salt Lake City International Airport, she noted.

"SkyWest will maintain our ground-handling responsibilities at the E concourse," she said.

The SkyWest layoffs are the latest in a string of job losses to hit the Utah economy. ATK Launch Systems announced plans to lay off 300 employees from the company's three Utah locations by the end of March and airbag maker Autoliv announced last month that it was cutting 250 jobs from its payroll.

The Utah Department of Workforce Services reported that from January 2008 to January 2009, Utah has lost 20,400 jobs, with the jobless rate nearing 5 percent.

SkyWest's actions came in response to Delta's announcement to take over baggage-handling duties that had been performed by SkyWest under their working partnership agreement.

Brett Rydalch, Delta Air Lines field director for airport customer service in the Salt Lake region, told the Deseret News the changes are being made to improve flight operations, reduce operating costs and streamline baggage handling in Salt Lake City.

"Basically by having one entity responsible for the baggage transfer process, we take some fingers off it and make it a simpler process and less opportunity for human error," Rydalch said.

The plan would also mean that all Delta aircraft "with first-class cabins would now be on a jetway so that customers won't have to walk across the ramp to get on an airplane."

Delta spokesman Anthony Black said the company will not comment on exactly how much money will be saved as a result of the cost-cutting measures.

Approximately 50 full-time positions will be created due to the changes, he said.

According to the company Web site, SkyWest began a partnership with Delta in 1987 as one of its connection carriers operating primarily out of Delta's Salt Lake City hub.

Together, Delta and SkyWest carry about 70 percent of the passengers using the Salt Lake airport.

For years, the airlines have worked harmoniously in their business relationship, but they have experienced some turbulence in the recent past.

Last year, SkyWest and Delta sued each other over disputes about contract reimbursements relating to the two carriers' flight agreements.

SkyWest sued Delta in February 2008, claiming that Delta owed it $25 million after failing to reimburse it for one week's worth of unanticipated passenger expenses. Delta responded by suing SkyWest in March 2008, contending that Atlantic Southeast and SkyWest breached their contract agreements with Delta by charging Delta for the unanticipated passenger expenses.

Snow said those legal disputes are not tied to Thursday's announcements.

"SkyWest remains a strong Delta partner across the U.S.," she said in an e-mail to the Deseret News. "We will maintain our Delta Connection Salt Lake City flying, even experiencing some growth in the summer schedules."

She noted that SkyWest will operate Delta's recently announced new service from Salt Lake City to Bismarck, N.D.; Des Moines, Iowa; El Paso, Texas; Fargo, N.D.; Milwaukee, Wis.; Nashville, Tenn., and Sioux Falls, S.D.

E-MAIL: jlee@desnews.com

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