Delta Ready To Cut 9,000 Jobs

Delta Air Lines Inc., the nation's third-largest carrier, said Thursday it will cut up to 9,000 jobs, reduce employee pay and make changes to its network to focus more on international flying as it moves swiftly to restructure its costs in bankruptcy.

The changes are part of the airline's effort to achieve an additional $3 billion in annual cost savings by the end of 2007. That's on top of $5 billion in annual savings Delta had previously said it wanted to achieve by the end of 2006.

The company's chief executive, Gerald Grinstein, will take a 25 percent pay cut and all other executives will take a 15 percent pay cut.

The job cuts are on top of roughly 24,000 that Delta said it would shed since 2001, when the terrorist attacks sent the major airlines into a tailspin most of them have never recovered from.

Delta and its subsidiaries listed in regulatory filings 65,300 employees as of June 30, but that figure included recently sold feeder carrier Atlantic Southeast Airlines. Delta on Thursday revised the figure to 52,000 employees.

Delta also owns a regional feeder carrier, Comair Inc., and Song.

Besides the pay cuts for executives, there also will be a 9 percent pay reduction for supervisory and other administrative personnel. Pay scales will be reduced 7 percent to 10 percent for most frontline employees, excluding those earning less than $25,000 annually.

Calyon Securities analyst Ray Neidl told the Atlanta Constitution he expects Delta to drop "non-strategic" flights between smaller cities while shifting more domestic flights to regional carriers or its Song low-fare unit.

That will free up its bigger jets for international routes.

"Their footprint is going to get smaller. They're not going to be a national carrier any longer," said Neidl.
The new cuts come eight days after Delta filed for bankruptcy protection in New York. No. 4 U.S. carrier Northwest Airlines Corp. filed for Chapter 11 later the same day.

Atlanta-based Delta has lost nearly $10 billion since January 2001. An initial transformation plan announced a year ago, which included up to 7,000 job cuts and the shedding of the airline's Dallas hub, was hampered by the high price of jet fuel, something most airlines have had trouble overcoming.

Delta has hubs in Atlanta, Cincinnati and Salt Lake City and is also a major U.S. carrier to Europe.

On its Web site, the carrier reassures travelers — "We are operating our full schedule of flights, honoring tickets and reservations as usual, and making normal refunds and exchanges. We are operating our full schedule of flights, honoring tickets and reservations as usual, and making normal refunds and exchanges." — and its frequent flier program members — "The award-winning SkyMiles program has not been affected, and you can continue to enjoy the program's benefits."

Though based in Atlanta, Delta decided to file for bankruptcy in New York. Bankruptcy experts say some major companies based elsewhere file in New York because that is where much of the investment community is located and because bankruptcy judges there are perceived to be predictable in how they handle major cases. Mississippi-based WorldCom Inc. filed for Chapter 11 in New York in 2002.