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Delta 'will be smaller,' CEO say

By JOHN MUNFORD
jmunford@TheCitizen.com

Delta Air Lines plans to cut between 7,000 and 9,000 jobs by the end of 2007, and pay will be reduced by 7-10 percent for most front-line employees, the company announced Thursday.

An estimated 3,500 Delta employees call Fayette County home, and all of them will likely feel the impact of the pay cuts while some may face losing their jobs.

At a meeting of the Fayette County Commission Thursday night, Tyrone Councilman Mike Smola called Delta’s news a “dark day” in the county’s history because of its many links to the company.

While the grim news was anticipated to some degree, it is still unknown what affect the proposed cuts and service changes will have on Hartsfield-Jackson International Airport.

The company also announced that CEO Gerald Grinstein will take a 25 percent pay cut, officers’ pay will be trimmed by 15 percent, and supervisors and other administrative personnel will be cut by 9 percent.

Delta filed for Chapter 11 bankruptcy protection last week, which the company is counting on to save roughly $1 billion a year. The company expects to save an additional $2 billion annually through “revenue and network productivity improvements” and “more competitive employment costs.”

The company is still on track to meet its goal of cutting an additional $5 billion by 2006 from the company’s spending recorded in 2002, Delta officials said.

The pay and work rule concessions sought from Delta pilots will save $325 million a year, and another $605 million in savings will come from the non-pilot work force, including management, the company said.

Delta will reduce its domestic capacity by between 15 and 20 percent but will increase its international offerings by 25 percent in 2006 to “pursue routes with greater growth potential,” officials said. Those changes are expected to save $1.1 billion a year.

The company plans to cut its operating fleet by more than 80 planes by the end of next year, while also reducing its number of plane models from 11 to seven to achieve maintenance savings.

“Delta will move quickly and decisively to do what is necessary to beat our competitors and meet our financial commitments, and this means we will become a smaller, more cost-efficient airline, with a strengthened network and a stronger balance sheet,” Grinstein said. “Our transformation will be sweeping and fast-paced; it must be if we are to survive and thrive as a stand-alone company in control of our own destiny.”

Delta has 52,000 employees worldwide. It is the world’s second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic ocean.