Delta eyes 2,000 job cuts via early retirement
Wednesday, January 14, 2009 by Shrish Pandey
"TOKYO (Reuters) - Delta Air Lines, which merged with rival Northwest Airlines last year, said it expects to let about 2,000 staff go this month through an early retirement program as it aims to trim capacity as much as 8 percent this year.
In December, Delta, now the world's biggest carrier, said it would offer employees severance packages, but it didn't say how many jobs it aimed to cut.
"We are expecting a number of around 2,000 because the capacity reduction is going to be around 6 to 8 percent," Delta CEO Richard Anderson told reporters in Tokyo.
"We will know more toward the end of this month, because we gave employees a wide window so that they can make the right decision."
Major airlines, battered by sagging travel demand and losses on fuel hedging costs, have been working to bolster their profitability by cutting capacity and finding new revenue streams. Capacity reductions affect the number of seats for sale and are achieved by cutting flights or replacing large planes with smaller ones.
Delta said last month its domestic capacity would fall 8 percent to 10 percent in 2009, and international capacity would fall 3 percent to 5 percent as travel demand wanes. Systemwise, that would mean a reduction of 6 to 8 percent.
Delta told reporters on Thursday that it sees a 10 percent decline in industry revenue in 2009 as the economic slowdown hits travel demand.
The airline said, however, it expects to save $5 billion this year from the plunge in oil prices since last summer."
In December, Delta, now the world's biggest carrier, said it would offer employees severance packages, but it didn't say how many jobs it aimed to cut.
"We are expecting a number of around 2,000 because the capacity reduction is going to be around 6 to 8 percent," Delta CEO Richard Anderson told reporters in Tokyo.
"We will know more toward the end of this month, because we gave employees a wide window so that they can make the right decision."
Major airlines, battered by sagging travel demand and losses on fuel hedging costs, have been working to bolster their profitability by cutting capacity and finding new revenue streams. Capacity reductions affect the number of seats for sale and are achieved by cutting flights or replacing large planes with smaller ones.
Delta said last month its domestic capacity would fall 8 percent to 10 percent in 2009, and international capacity would fall 3 percent to 5 percent as travel demand wanes. Systemwise, that would mean a reduction of 6 to 8 percent.
Delta told reporters on Thursday that it sees a 10 percent decline in industry revenue in 2009 as the economic slowdown hits travel demand.
The airline said, however, it expects to save $5 billion this year from the plunge in oil prices since last summer."
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