Delta Is Ready For Job Cuts
Delta Air Lines Inc. will cut 13,000 jobs, or 16 percent of its worldwide work force, and reduce its flight schedule by 15 percent as a result of the drastic drop in demand for air travel after the Sept. 11 attacks.
With the cuts, Delta, the No. 3 U.S. airline, joins every major U.S. air carrier except Southwest Airlines Co. in reducing employment and schedules in the aftermath of the attacks by hijacked airliners that destroyed the World Trade Center in New York and damaged the Pentagon outside Washington.
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The pilots' union Tuesday urged Congress to pass legislation allowing pilots to carry firearms in cockpits, a move the union says could prevent more terrorist hijackings.
The cruise industry is feeling effects from the terrorist attacks, too: One cruise line has folded, putting all ashore in mid-voyage. Two others are changing routes for many of their ships, steering away from the Mideast, the Indian Ocean, Europe and Africa.
"The operational and financial outlook for airlines has changed precipitously and drastic measures are required if we are to avoid becoming the first economic casualty of the war," said Leo Mullin, Delta chairman and chief executive.
Mullin said the airline had to cut back to slow its negative cash flow since the attacks.
The carrier said it expects a significant number of the job cuts over the next few months to come through voluntary programs, ranging from one-year leave to voluntary severance and early retirement.
"We intend to provide time for that to happen," said Mullin, adding that Delta's involuntary programs will be among the most generous in the industry.
Delta said it has also instituted a broad recoverplan that includes freezing all hiring, eliminating discretionary spending and cutting capital expenditures. The airline is also examining reducing food service, entertainment options and other items on many flights.
Mullin said he will forego his salary for the remainder of the year.
As part of its schedule reductions, Delta said it would suspend 50 percent of its Delta Express service. It will also suspend through March flights from JFK Kennedy Airport to Tokyo, Tel Aviv, Munich, Dublin, Shannon, Ireland, Cairo, Zurich and Brussels.
The Atlanta company last week said it would unveil job cuts as part of moves to reduce the size of its operations.
The attacks led to the shutdown of U.S. commercial aviation for two days, the introduction of costly security measures, and left many too afraid to fly. Congress and President George W. Bush approved a $15 billion aid package for airlines earlier this week in an effort to stave off bankruptcies.
Delta, the largest employer in metro Atlanta with 32,000 workers, has large work forces at its other hubs — Cincinnati, Dallas-Fort Worth and Salt Lake City. The airline also has extensive operations in Orlando, Fla., New York and Los Angeles.
Company spokesman Tom Donahue said Delta has lost about $1 billion since the terrorist attacks. The airline will get about $600 million from the $5 billion cash relief approved by Congress last week, Donahue said.
"The direct aid granted by the government helps Delta meet its immediate financial obligations, but with passenger demand forecast to remain depressed for at least a year, the need to reduce costs remains a financial imperative," Donahue said.
With fewer planes flying, some Georgia airports are also cutting jobs.
The Augusta Regional Airport plans to cut about a third of its 98-member staff before Christmas, Augusta Aviation Commission members said Monday.
"Osama bin Laden has changed the landscape out there," said Augusta airport director Ken Kraemer. "With reduced flights, with reduced numbers of passengers, that is translating into reduced revenues."
Savannah International Airport spokesman Patrick Graham said there are no immediate plans to cut jobs, but vacant jobs will not be filled. Savannah, which employs 104 people, has 42 daily flights.
Officials at Hartsfield Atlanta International Airport said it's too soon to determine if there would be any layoffs, said spokeswoman Yolanda Clark.
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