General Lee
Well-known member
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- Aug 24, 2002
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Read the third to the last paragraph. No additional furloughs EXPECTED. I hope not......
Reuters
Delta to Cut Up to 7,000 Jobs
Wednesday September 8, 4:27 pm ET
By Karen Jacobs
ATLANTA (Reuters) - Delta Air Lines Inc. (NYSE
AL - News) said on Wednesday it would cut 6,000 to 7,000 jobs, or about 10 percent of its work force, over the next 18 months and drop Dallas/Fort Worth as a hub as it tries to avert bankruptcy.
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The changes are part of the No. 3 U.S. airline's plan to save $5 billion a year by 2006 and are the result of an eight-month review by Chief Executive Gerald Grinstein.
Speaking to employees and reporters in Atlanta, Grinstein said bankruptcy remained a "real possibility" for Delta if all of the parts of his rescue plan do not come together, including a concession deal with the carrier's pilots union.
Delta, like other airlines, has been plagued by high costs, weak revenue, skyrocketing fuel prices and rising competition from discount carriers.
Its shares fell nearly 10 percent on Wednesday.
"Bankruptcy is still a possibility," Grinstein said. "If the pilot early retirement issue is not resolved before the end of this month or if all of the other pieces don't come together in the near term, we will be required to restructure through the courts."
EARLY PILOT RETIREMENTS
Delta and its pilots have been in concession talks for more than a year. In recent months, larger numbers of pilots have opted for early retirement to take advantage of a lump-sum pension payout they fear may not be available if the company goes bankrupt.
The departure of too many experienced pilots could lead to the grounding of part of Delta's fleet, Grinstein said.
"I don't think they really want to retire, but they look at United and they become frightened," he told reporters.
Bankrupt United Airlines (OTC BB:UALAQ.OB - News) has said it will halt pension payments while in Chapter 11. US Airways (NasdaqNM:UAIR - News) is also seeking pilot concessions to avoid a second bankruptcy. Its pilots' pension was terminated during bankruptcy and replaced with a cheaper one.
A spokesman for the Delta pilots said the union has worked with management to ensure Delta continues to operate all flights without disruptions, noting that no flights have been canceled in 2004 due to early pilot retirements.
SONG HERE TO STAY
Delta also plans to increase international service and expand its low-cost unit, Song, of which Grinstein himself said he had once been "one of the skeptics." Under the initial expansion, Song will add 12 planes.
Many have criticized the airline-within-an-airline strategy, created by legacy carriers to offset competition from lower-cost rivals.
"I was a little bit surprised to see that they would take (Song) further," said airline industry consultant Robert Mann of R.W. Mann & Co. "In the short them, they may just have no alternative but to do that."
In addition to job cuts, Grinstein said the company will reduce employee pay and benefits and lower management overhead costs by 15 percent. It also will create an employee profit sharing program.
Grinstein said the jobs that would be cut had not been determined but that he did not expect any additional pilot furloughs. He said Delta will eliminate 2,100 jobs in Dallas, about one-third of its work force there, and slash flights in that city while expanding service at its remaining three hubs in Atlanta, Cincinnati and Salt Lake City.
Grinstein also said recent hurricanes Frances and Charley cost the airline $25 million. A spokesman could not provide further details on the figure.
Delta shares closed 44 cents lower at $4.04 on the New York Stock Exchange. Delta bonds with an 8.3 percent coupon due 2029 rose by about 1 cent on the dollar to about 29.5 cents on the dollar.
Bye Bye--General Lee
Reuters
Delta to Cut Up to 7,000 Jobs
Wednesday September 8, 4:27 pm ET
By Karen Jacobs
ATLANTA (Reuters) - Delta Air Lines Inc. (NYSE
AL - News) said on Wednesday it would cut 6,000 to 7,000 jobs, or about 10 percent of its work force, over the next 18 months and drop Dallas/Fort Worth as a hub as it tries to avert bankruptcy.ADVERTISEMENT
The changes are part of the No. 3 U.S. airline's plan to save $5 billion a year by 2006 and are the result of an eight-month review by Chief Executive Gerald Grinstein.
Speaking to employees and reporters in Atlanta, Grinstein said bankruptcy remained a "real possibility" for Delta if all of the parts of his rescue plan do not come together, including a concession deal with the carrier's pilots union.
Delta, like other airlines, has been plagued by high costs, weak revenue, skyrocketing fuel prices and rising competition from discount carriers.
Its shares fell nearly 10 percent on Wednesday.
"Bankruptcy is still a possibility," Grinstein said. "If the pilot early retirement issue is not resolved before the end of this month or if all of the other pieces don't come together in the near term, we will be required to restructure through the courts."
EARLY PILOT RETIREMENTS
Delta and its pilots have been in concession talks for more than a year. In recent months, larger numbers of pilots have opted for early retirement to take advantage of a lump-sum pension payout they fear may not be available if the company goes bankrupt.
The departure of too many experienced pilots could lead to the grounding of part of Delta's fleet, Grinstein said.
"I don't think they really want to retire, but they look at United and they become frightened," he told reporters.
Bankrupt United Airlines (OTC BB:UALAQ.OB - News) has said it will halt pension payments while in Chapter 11. US Airways (NasdaqNM:UAIR - News) is also seeking pilot concessions to avoid a second bankruptcy. Its pilots' pension was terminated during bankruptcy and replaced with a cheaper one.
A spokesman for the Delta pilots said the union has worked with management to ensure Delta continues to operate all flights without disruptions, noting that no flights have been canceled in 2004 due to early pilot retirements.
SONG HERE TO STAY
Delta also plans to increase international service and expand its low-cost unit, Song, of which Grinstein himself said he had once been "one of the skeptics." Under the initial expansion, Song will add 12 planes.
Many have criticized the airline-within-an-airline strategy, created by legacy carriers to offset competition from lower-cost rivals.
"I was a little bit surprised to see that they would take (Song) further," said airline industry consultant Robert Mann of R.W. Mann & Co. "In the short them, they may just have no alternative but to do that."
In addition to job cuts, Grinstein said the company will reduce employee pay and benefits and lower management overhead costs by 15 percent. It also will create an employee profit sharing program.
Grinstein said the jobs that would be cut had not been determined but that he did not expect any additional pilot furloughs. He said Delta will eliminate 2,100 jobs in Dallas, about one-third of its work force there, and slash flights in that city while expanding service at its remaining three hubs in Atlanta, Cincinnati and Salt Lake City.
Grinstein also said recent hurricanes Frances and Charley cost the airline $25 million. A spokesman could not provide further details on the figure.
Delta shares closed 44 cents lower at $4.04 on the New York Stock Exchange. Delta bonds with an 8.3 percent coupon due 2029 rose by about 1 cent on the dollar to about 29.5 cents on the dollar.
Bye Bye--General Lee
