MSN Story
http://www.msnbc.msn.com/id/23690403
ATLANTA - Delta Air Lines said Tuesday it will offer voluntary severance payouts to roughly 30,000 employees — more than half its work force — and cut domestic capacity by an extra 5 percent this year as part of an overhaul of its business plan to deal with soaring fuel prices.Executives at Atlanta-based Delta said in a memo to employees that the airline’s goal is to cut 2,000 frontline, administrative and management jobs through the voluntary program, attrition and other initiatives.
A spokeswoman says that if more than that amount agree to take the voluntary severance, that will be allowed. The severance program primarily affects mainline Delta employees. It will not affect Delta pilots, who have a union contract with the company, and employees at Delta regional carrier Comair, which is based in Erlanger, KY
Delta had 55,044 total full-time employees as of the end of last year.
Oil prices recently cracked $111 a barrel, nearly twice what they were a year ago.
The memo from Chief Executive Richard Anderson and President Ed Bastian did not mention Delta’s talks with Northwest Airlines Corp. about a combination that would create the world’s largest airline. Bastian was updating investors Tuesday at a conference in New York.
On Monday, Delta’s pilots union said it had told company executives it can’t agree on seniority issues with its counterpart at Northwest, raising serious doubts about the prospect of a combination of the two companies.
The disclosure was made in a letter from the head of the pilots union at Delta, Lee Moak, to rank-and-file Delta pilots.
The letter does not mention Northwest, but describes the union that Delta’s pilots had been negotiating with as the only one they were focused on talking with. Multiple officials close to the talks have said in recent months that the other company was Northwest.
The letter talks about the discussions with the other carrier in the past tense, suggesting at least for now there won’t be further talks.
The two carriers don’t need a pilot seniority integration deal in advance to move forward with a combination, but Delta Air Lines Inc. executives have said they would not move forward with any combination unless the seniority of their employees was protected.
A Delta-Northwest combination deal could proceed without a pilot seniority agreement, but that would be up to the boards of the two companies.
At least one airline analyst, Calyon Securities’ Ray Neidl, sounded doubtful that will happen, at least in the near term.
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