| All News |
| If you want to see all news from the last 100 days in order by date,
click here. |
|
| Search News |
| Enter any query and search the aviation news database |
|
|
 |
|
 |
|
International
Aviation News |
|
 |
|
 |
|
|
|
|
| |
Delta Looks To Cut 2,000 Jobs, Scale Back Flights
|
Delta Air Lines on Tuesday unveiled plans to cut 2,000 jobs and scale back flights, leading efforts by US carriers to cut costs in the face of rising fuel prices and a weakening economy.
Delta, which has been unable to seal a merger with rival Northwest Airlines, will offer voluntary retirement and buyout packages to 30,000 employees.
It is aiming to cut 1,300 rank and file jobs and 700 administrative and management jobs, or more than 3 percent of its work force overall.
"If we need to, we´ll go deeper," Delta Chief Financial Officer Ed Bastian told analysts at a JP Morgan investor conference on Tuesday, referring to the cost-saving plan.
Delta shares, which have been on a slide for the last month, as hopes for a merger recede, rose about 8 percent to USD$9.95 on the New York Stock Exchange.
In a regulatory filing, Delta also said it will cut flights in the United States, aiming to reduce 2008 domestic capacity by an additional 5 percent by August, resulting in a 10 percent year-over-year capacity cut.
Delta planned to take 15 to 20 mainline aircraft and 20 to 25 regional jets temporarily out of service. It also identified USD$200 million in capital expenditure to be deferred or eliminated.
Delta has been looking actively at mergers for the past two months, but hopes for a deal took a blow earlier on Tuesday, as Delta´s pilot union said it could not reach agreement over seniority with pilots of the potential merger partner, widely reported to be Northwest Airlines.
"Our long-term view remains that consolidation may be the right course of action," Delta Chief Executive Richard Anderson and CFO Bastian said in a letter to Delta staff, included in the regulatory filing.
Delta´s main rivals are also rolling out plans to cut capacity, the day after a barrel of crude touched a record high of USD$111.80.
The fuel price spike coupled with a steadily weakening US economy has stalled the airline industry´s modest recovery from the 2001-06 downturn. As a result, airlines have seen a steep decline in their share prices.
The previous downturn resulted in bankruptcies and unprecedented out-of-court restructurings, but experts say carriers appear leaner and in better shape this time around to weather the oncoming turbulence.
Jeff Misner, Chief Financial Officer of Continental Airlines told the JP Morgan conference that demand remained pretty good, but added: "The problem is we are not covering the cost of fuel right now."
Northwest Chief Financial Officer Dave Davis told the conference that bookings in March are strong. It is harder to forecast bookings for April and May, which tend to be "iffy," he said.
"We expect to have a strong summer as well," Davis said. "Despite some storm clouds on the horizon, bookings for the company have held up quite well."
Northwest is evaluating capacity changes, but has given no firm targets.
United Airlines parent UAL, said it will shrink its fleet by up to 4 percent this year to combat the skyrocketing cost of jet fuel.
In a message to employees, chief executive Glenn Tilton said the airline plans to eliminate 15 to 20 of its older, less fuel efficient narrow-body planes. United´s fleet currently has 460 aircraft.
"Continued uncertainty about the overall US economy with the price of fuel at historically high levels has put significant pressure on all US carriers," Tilton said.
The fleet reduction is part of a broader effort to offset a possible USD$1 billion increase in fuel costs in 2008, UAL´s chief financial officer Jake Brace said.
United currently has 20 percent of its anticipated 2008 fuel requirements hedged, Brace said. That is up from 16 percent as reported in previous regulatory filings.
Southwest Airlines, the leading US discount carrier, said it continues to evaluate growth plans in light of high oil prices.
Chief Financial Officer Laura Wright said that Southwest is sticking with its forecast of growth of up to 5 percent for 2008. Like other airlines, Southwest has been slowing expansion this year. Southwest shares rose about 3.9 percent to USD$12.02.
"We are looking at an industry that has chronic diseases like overcapacity and structural considerations that foster and feed that overcapacity," said Daniel Ortwerth, transport analyst at investment advisers Edward Jones. "Southwest... is the one airline that actually merits some consideration for the long-tern investor." |
| |
| News material on the Site is copyright and belongs
to the Company or to its third party news provider, and all
rights are reserved. Any User who accesses such material may
do so only for its own personal use, and the use of such material
is at the sole risk of the User. Redistribution or other commercial
exploitation of such news material is expressly prohibited.
Where such news material is provided by a third party, each
User agrees to observe and be bound by the specific terms of
use applying to such news material. We do not represent or endorse
the accuracy or reliability of any of the info contained in
any news or external websites referred to in the news. |
|
|
|
|
|
|
|
