Some Airlines Begin to Increase Staff Again; 'Vast majority of fat's been cut out of this business'

U.S. airline employment increased in February from a year earlier, the first monthly increase in more than two years and a sign that the industry may have reached its low point for staffing.

"The vast majority of the fat's been cut out of this business," says industry consultant Jon Ash of Washington, D.C. "There's not a lot left."

According to figures released Thursday by the U.S. Bureau of Transportation Statistics, airlines employed the equivalent of 405,400 full-time workers, up a scant 0.2% from February 2006.

The tiny increase follows 25 months of declines on a year-over-year basis.

February employment had dropped each year at least since 2003, when airlines were slashing costs to survive the post-9/11 travel downtown. It probably dropped in 2002 in response to 9/11, but a change in reporting requirements makes earlier comparisons impossible.

Ash expects airlines to increase employment slightly this year as the USA's big traditional carriers complete their restructurings. The last two in Chapter 11 bankruptcy, Delta and Northwest, plan to exit in the next two months.

With restructuring in the past and planes at record-full levels, Ash says that carriers need again to focus on their product rather than cost-cutting.

"They all recognize that the quality of service out there is pretty lousy," he says.

Airlines will use some of the new employees to "schmooze" with passengers, Ash says -- helping them check in at automated kiosks and helping them to keep moving in lengthy lines.

"Most airlines are hiring right now," says aviation consultant Jerry Glass, who recruits airline workers.

"We're seeing increased activity at all levels -- executives, management and front-line employees," says Glass, a former US Airways executive.

Industry employment isn't expected to return to its pre-9/11 peak anytime soon. The increased use of automation will still keep staffing at lower levels than in 2000.

The big traditional airlines, which employ two out of every three airline workers, have been recalling pilots and other employees in the past year. Nonetheless, their overall employment slipped in February vs. a year earlier. Discount airlines and regional feeder airlines drove the overall industry growth.

No. 1 American Airlines began to recall pilots in January. At the time, CEO Gerard Arpey had told analysts that he expected to "step that up" later this year. Tempe, Ariz.-based US Airways plans to recall 240 this year, or about 15% of furloughed pilots.

It's also recalling 90 flight attendants. Since US Airways' merger with America West in 2005, the combined carrier has recalled about 1,100 employees.