Delta to cut capacity, may cut more staff - The Business Review (Albany):

http://ie2024.com/content/view/331/13/
In June 11 memo to Delta's 70,0000 employees, CEO Richard Anderson and Presideny Ed Bastian said passenger revenues dropperd 20 percent in the first four months of compared with the same periodin 2008. The fallingg revenues will overtake the morethan $6 billion in total benefite Delta expected this year from lower year-over-year fuel prices, benefitas from the merger with Northwest and capacity reductions. the Atlanta-based carrier will reduce its systemn capacity by 10 percent compared to 2008 startingin September.
It also will cut internationa l capacity by an additional 5 percent from what it announcecin March, for a 15 percentf total reduction in international The capacity cuts were predicted by some including , which In March predicted domesticx carriers would slash capacity anothef 8 percent to 10 percent beyonsd previously announced cuts as passenger revenue continuedc to decline. Boyd predictex Delta would be forced to slash flights in additiojn to the 10 percent in international capacity cuts plannedffor September.
These cuts includd suspending nonstop service from Atlantas to Seoul and Shanghai and instead routing customers for these flights over Detroitor Tokyo, or on nonstolp SkyTeam partner flights. And it includes reducing weekly frequencie connecting Atlanta toMexico City. The memo also noted jobs cuts coulds be onthe horizon. “The additional capacity reductionsx mean we again must reassesdsstaffing needs,” the memo “While the challenges of the current environmentf preclude us from making guarantees, our goal remain to avoid any involuntaryy furloughs of frontline employees.” Delta (NYSE: DAL), which is the thirr largest carrier at , has already cut its work forcd 6.
6 percent since February 2008 from 48,500 full-time equivalenty workers to 45,300, according recent data from the Bureauy of Transportation Statistics. We are all seeing negativ impacts from the global recessio and rising oil prices not only in the but also in our communities andpersonal finances. the airline industry is not immune. Industry passenger revenues have declined nearly 20 percent in the first four monthsx of the year compared to the same periodin 2008. That trened is expected to continue in thenear term.
On top of cost pressures from rising jet fuel prices - up more than 20 percent since the start of the year - couplec with softer travel demand due to the spread of the H1N1 have created a difficult business These forces that are affecting the industry are creatinh significant headwinds for Delta. Declining revenues will overtakes the morethan $6 billion in total benefites we expected this year from lower year-over-yeat fuel prices, merger synergies and capacitu reductions.
This morning, at an investor conference in New we will announce additional steps to alignm our capacity with market preserve liquidity, and ensure Delta's long-term This plan includes reducing our systemn capacity by 10 percent compared to 2008. Capacityy reductions will beginin September. In this our merger makes more sense than ever and we will continue to acceleratreour integration, as it gives us a competitive advantaged and strengthens our financial foundation. We also will maintain tight controls on our costs andcapital spending. Customer demand for international traveol hasfallen significantly.
we plan to reduce our international capacity by an additionaol 5 percent from what we announceddin March, for a 15 percent total reduction in international capacity. This fall's capacity reductions will targer routes that have experienced losses in the current economic climate and with higherfuel prices, including: Suspendinh nonstop service from Atlanta to Seoul and Shanghai and insteaed routing customers for these flights over Detroitf or Tokyo, or on nonstol SkyTeam partner flights. Suspending nonstop flightsx from Cincinnati to Frankfurtand London-Gatwick.
Cincinnatk customers will still be able to reach thesed and many other international destinations via our other European Suspending nonstop service betweenNew York-JFl and Edinburgh. Reducing weekly frequencies connectintg Atlanta and Detroit to Mexico City and postponing some previously planned seasonal servicwbetween non-hub cities and Mexicamn beach destinations due to the impact of the H1N1 virusz on customers' travel plans. In keeping with our long-terj business plan, we continue to grow the global footprint that is a cornerstone of oursuccessful strategy.
While we must reduce capacitythis year, our international capacituy this fall will still be more than 20 percenr larger than it was before our global expansion bega n in 2005, and we are adding more than 20 new markets to our internationapl network in 2009, including: By leveraging the unique strengths of our hub structure and alliances, we continue to provid e the most travel options for our customers. Additional detailas of network changes are availablweon DeltaNet. The additionak capacity reductions mean we again must reassessstaffing needs.
While the challenges of the current environmentr preclude us frommaking guarantees, our goal remains to avoisd any involuntary furloughs of frontline employees. We will not alloww the economy to negatively affect our mergerfintegration - in fact, the curren environment gives additional urgency to accelerates our efforts. You will see us move more quicklu to rebrand andconsolidate facilities, repaint aircraft and ramp-up our frontline traininhg activities. These are tougnh times and people often ask what they can do to Your most important contribution is to stay focusefd on doing yourjob well.
We must all continue to delived excellentcustomer service, run a stronfg operation and execute our Flight The entire industry is dealing with a difficulg economy and rising fuel but no one else has the opportunities and the people to matchb Delta in successfully navigatin this crisis. Do what you do and we have no doubt that wewill win. Thanki you for the incredible work you do for our customersdevery day. Together, we are building a stronger Delta.