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Delta slashes thousands of jobs
Delta Air Lines is cutting up to 9,000 jobs or 17% of its workforce to help reduce costs by $3 billion.
In the wake of its move into Chapter 11 bankruptcy protection, the airline says reducing employee and even executive pay will help it return to profitability in two years.
The plan to reduce costs and boost revenues by $3 billion annually by the end of 2007 is on top of the $5 billion cutbacks targeted for next year.
The third largest US carrier says it will cut employees pay by up to 10%, and reduce chief executive Gerald Grinstein’s compensation by 25%.
The airline, which posted losses of almost $10 billion in the past four years, is looking to save $325 million in annual wage and benefit reductions from its pilots.
“Our transformation will be sweeping and fast-paced,” Mr. Grinstein said. “It must be if we are to survive and thrive as a stand-alone company in control of our own destiny.”
Delta has come under pricing pressure from discount airlines such as AirTran and JetBLue Airways expanding in its key East Coast markets, said Bloomberg News.
Delta also plans to reduce its US flight capacity by up to 20%. At the same time, the airline plans to increase international capacity by up to 25% next year.
Delta filed for bankruptcy protection September 14, the same day as Northwest Airlines.
Meanwhile, Northwest is to lay off 1,400 flight attendants between October 31 and January 2006 and 400 pilot jobs in coming months.
Nearly half of US airline seats are now being flown by carriers operating under court protection from creditors.
US airline layoffs this year have reached 44,000, according to outplacement firm Challenger, Gray & Christmas.
Report by David Wilkening
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