Delta cuts jobs and domestic flights
Affected by record fuel costs and the weakening national economy, Delta Air Lines Inc. said yesterday it plans to cut up to 2,000 jobs through voluntary buyouts offered to half of its work force, the Atlanta Business Chronicle reported. Delta, based in Atlanta, also plans to reduce domestic routes while adding more international flights and remains open to merging with another airline.
Delta President and Chief Financial Officer Edward Bastian broke the news yesterday at the 2008 JPMorgan Aviation and Transportation Conference. He noted that in the past three months, fuel prices have jumped nearly 20 percent and the airline’s 2008 fuel bill is now expected to increase by nearly $900 million more than it projected for the year and $2 billion more than 2007. Delta said it is focusing in on cost and cash-flow discipline, which includes “voluntary staff reductions.” It also plans continued international expansion and more domestic capacity reduction.
In April, Delta will offer two buyouts to its U.S. non-pilot employees, a total of about 30,000 people. It estimates the 2,000 total job cuts, about 3 percent of its work force, will save the company up to 10 percent in costs this year.
Bastian said global expansion would be the key to the airline’s long-term success. This summer, more than 40 percent of its capacity will be dedicated to international routes, where fares better cover higher fuel costs.