OK, this has to be asked since no one else has: if DAL is hiring heavily, why would anyone willing to fly out of ATL prefer to work for Tranny?
Delta Exec Says Carrier Cutting Costs
Tuesday December 4, 2:44 pm ET
By Harry R. Weber, AP Business Writer Delta President Says Airline Cuts Costs to Offset Fuel Prices
ATLANTA (AP) -- A Delta Air Lines Inc. executive said Tuesday the nation's No. 3 carrier is freezing hiring in certain areas as part of a cost-cutting move aimed at dealing with high fuel prices that will weaken the company's fourth-quarter results.
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Delta shares fell nearly 5 percent in afternoon trading. Shares of several other major carriers also fell.
President and Chief Financial Officer Ed Bastian said at the Calyon Securities U.S. Airline Conference in New York that high fuel costs will "dampen" Delta's operating margin -- the ratio of operating income to sales revenue, expressed as a percentage -- in the quarter ending Dec. 31.
He said Delta's current projection for operating margin is flat to minus 2 percent. Previously, the company projected an operating margin of 3 percent to 5 percent for the quarter. For all of 2007, Bastian said Delta is still projecting an operating margin of around 6 percent.
The company did not provide any updated profit, sales or earnings per share projections for the fourth quarter.
Delta shares fell 93 cents, or 4.8 percent, to $18.65 in afternoon trading Tuesday. Standard & Poor's reiterated its hold rating on Delta's stock.
Cost cuts will be key to helping Delta deal with higher fuel prices, Bastian said, noting that jet fuel prices are up nearly 50 percent since the beginning of 2007. He suggested there could be job cuts, but he didn't offer any numbers or specifics.
Bastian said Delta will cancel or reduce flying of some aircraft. Capacity for 2008 is expected to still be up 2 percent, reflecting a decline in domestic capacity of 4 percent to 5 percent and an increase in international capacity of 15 percent, Bastian said. By 2009, Bastian said, 40 percent of Delta's flying will be on the international side.
Delta has initiated a hiring freeze on any non-customer facing positions. It also wants to improve self-service kiosk options for customers and increase the number of people buying tickets online, Bastian said.
Delta is still evaluating whether to sell any noncore assets, including regional feeder carrier Comair Inc., Bastian said. No decision on Comair has been made, he said.
Meanwhile, Bastian offered little insight into whether Delta will combine with another airline.
Bastian said that the board of the Atlanta-based company is still evaluating whether to enter into a deal.
Bastian said the value to shareholders of remaining a standalone carrier versus a combination are being considered. He did not say when the review would be complete, and analysts at the conference did not ask him to elaborate.
Amid increased speculation about industry consolidation and Delta's possible role in it, two of the airline's executives have left in the last three weeks: vice president of operations Joe Kolshak and vice president of corporate communications Jeff Battcher.
Delta has said Bastian would keep his dual role of president and CFO instead of the airline hiring a separate CFO.
Last month, Delta denied reports that it was talking to UAL Corp.'s United Airlines about a combination. Since then, it has said little about the issue, and United's top executive recently refused to fully address the issue.
hows that for an answer. jeff neely.