Delta to trim up to 13,000 jobs, reduce schedule indefinitely
ATLANTA (AP) – With most of its planes flying two-thirds empty since the recent terrorist hijackings, Delta Air Lines said Wednesday it will cut its flight schedule and work force by about 15 percent, eliminating up to 13,000 jobs.
Delta Chairman Leo F. Mullin said he had no choice because the slump threatens the very survival of the nation’s third-largest airline.
”War was declared on the United States of America, using aviation as the instrument of destruction,” he said. ”As a result, the operational and financial outlook for airlines has changed precipitously, and drastic measures are required if we are to avoid being among the first economic casualties of the war.”
Delta was the last of the nation’s six major airlines to announce cuts in the aftermath of the Sept. 11 attacks on New York and Washington. Dallas-based Southwest is the only major airline that has not announced job reductions or schedule cuts since the attacks.
Overall, U.S. airlines plan to shed about 93,000 jobs, with aircraft maker The Boeing Co. cutting up to 30,000 more by the end of next year, as frightened Americans largely have abandoned air travel.
Mullin said Delta planes are only 33 percent to 35 percent full on most flights since the attacks, far below the 65 percent load factor the airline needs to break even. The company is averaging about 140,000 daily passengers, compared with 300,000 before the attacks.
Delta has lost about $1 billion since the Sept. 11 attacks and expects to receive about $600 million from the $5 billion cash relief package President Bush signed Saturday.
Delta has about 82,500 employees. The cuts, including about 1,700 pilots, will be completed by the end of the year.
Delta, based in Atlanta, has hubs in Cincinnati, Dallas-Fort Worth and Salt Lake City and extensive operations in Orlando, Fla., New York and Los Angeles.
Delta also plans to chop in half the operations of its lower-cost subsidiary, Florida-based Delta Express, which flies between Florida and 13 cities in the East and Midwest. It also will reduce or eliminate meals on many flights.
Delta said it would offer incentives for volunteers to leave their jobs.
Delta was not forced to cut as deeply as some airlines because of its strong balance sheet – it had $2.55 billion in cash before the government relief package, said Raymond Neidl, an analyst with ABN Amro Inc.
”They’re probably situated better than some of the others,” Neidl said.
Mullin also told reporters he will take no salary the rest of the year. Mullin has a base salary of $745,833 and received a $1.4 million bonus in 2000.
The airline is developing promotions designed to lure people back onto planes, including one involving discounted tickets from New York, Mullin said.
Delta’s Shuttle service in Boston, New York and Washington had about 3,000 passengers per day before the attacks. On Tuesday, about 200 people flew it, Mullin said.
”The business community in New York is not back yet to anywhere near where it ought to be,” he said. ”Business has got to get back to being in business.”
Outside the United States, Air Canada said Wednesday it was laying off 5,000 more employees while Scandinavian Airlines System said it will cut up to 1,100 jobs. British Airways, Swissair and other carriers have also announced cutbacks.
Other U.S. airlines have announced about 80,000 job cuts since the attacks on New York and Washington, including American, America West, Continental, Northwest, United and US Airways.
Delta shares rose 34 cents to close at $24.86 on the New York Stock Exchange.
On the Net: http://www.delta.com
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