More Job Cuts At Delta

Delta Air Lines is cutting 7,000 to 8,000 more jobs to try to stem dramatic financial losses following last year's terrorist attacks and a still sluggish economy.

Chairman and CEO Leo F. Mullin told company employees Thursday that he hoped many of the job reductions, which will include management, could come through voluntary-leave, early retirement and severance programs. If there are not enough volunteers for these programs, the company will lay off workers.

With these latest cuts, Delta has slashed 21,000 jobs, or 25 percent of its work force, since Sept. 11, 2001.

The cuts come two days after the Atlanta-based carrier posted a third-quarter loss of $326 million and said it did not see any improvement coming in the near future.

"In the current environment, with a high number of available seats and a low level of passenger demand, traffic continues to be stimulated primarily by fare sales that have driven revenue down to levels last seen in 1995," Mullin said in a memo to employees.

"Until demand returns and business conditions otherwise improve, Delta's survival and our potential for future success requires that we maintain tight control of all facets of the business."

The job cut announcement helped Delta stock, as shares gained 61 cents, or 7 percent, to $9.11 in afternoon trading Thursday on the New York Stock Exchange.

Airlines are struggling to recover record losses since last year's terrorist attacks. US Airways filed for Chapter 11 bankruptcy in August, and executives at No. 2 United Airlines have said they may not be able to avoid the same fate.

Mullin blamed the industry woes on higher airline insurance premiums and government security mandates that will cost the industry $4 billion this year. He said that doesn't include $2.5 billion in lost revenues from passengers who won't fly because they're afraid or hate the hassle that comes with the new measures.

Since Jan. 1, Delta has lost $909 million, nearly double what it lost in the first nine months of 2001.

To trim operating costs, Delta plans to ground 15 long-range MD-11 planes, most by next summer, replacing them with smaller planes to cut the cost of international flights. Delta will also put off delivery of 29 new Boeing aircraft — five planes scheduled for 2003 and 24 more in 2004. The company expects the deferrals will save $1.3 billion.

While it continues to reduce capacity on many flights, Delta plans to discontinue others altogether. On Dec. 1, Delta will cancel its daily, nonstop flights from Atlanta to Rio de Janeiro and Buenos Aires.