Drastic Measures: Delta Offers Half Its Workforce Buyouts | Aero-News Network
Aero-News Network
RSS icon RSS feed
podcast icon MP3 podcast
Subscribe Aero-News e-mail Newsletter Subscribe

Airborne Unlimited -- Most Recent Daily Episodes

Episode Date

Airborne-Monday

Airborne-Tuesday

Airborne-Wednesday Airborne-Thursday

Airborne-Friday

Airborne On YouTube

Airborne-Unlimited-04.22.24

Airborne-Unlimited-04.16.24

Airborne-FlightTraining-04.17.24 Airborne-AffordableFlyers-04.18.24

Airborne-Unlimited-04.19.24

Join Us At 0900ET, Friday, 4/10, for the LIVE Morning Brief.
Watch It LIVE at
www.airborne-live.net

Tue, Mar 18, 2008

Drastic Measures: Delta Offers Half Its Workforce Buyouts

Will Ground As Many As 45 Planes

ANN REALTIME UPDATE 03.18.08 1545 EDT: In today's economic climate, "modestly profitable" may be all an airline can hope for... and that's the goal for Delta Air Lines in 2008. But it's going to take some drastic measures to get there.

On Tuesday, Delta Chief Financial Officer Ed Bastian announced it will offer 30,000 early buyouts to counter record high fuel prices and a slumping economy, and ground up to 45 airliners, or twice as many planes as originally planned.

The carrier aims to reduce its non-pilot jobforce by 2,000 workers, according to Bloomberg... but Delta will accept early retirements from anyone among those offered the option.

The move follows steps taken by a slew of other carriers in recent days -- including Northwest, JetBlue, and United -- that also included cutting capacity, and grounding older, less-efficient aircraft.

Bastian said the cuts may result in Delta being "modestly profitable" in 2008. "It is not out of the question for Delta to be profitable this year," he said.

Delta has taken by far the most drastic action to date to curb losses, even as the number three carrier said its fuel bill will be $2 billion higher this year than in 2007. But one analyst considers Delta's cuts to be "better than expected."

"They're really trying to take out a significant amount of capacity," added FTN Midwest Research Securities Corp. analyst Michael Derchin.

The stock market reacted favorably to the news, with Delta shares rising as much as 18 percent over Monday's losses.

Original Report

1000 EDT: Delta Air Lines says its biggest expense, fuel, has risen 85 percent in cost in the past year... far higher than the airline projected when it exited from Chapter 11 protection last year. Faced with a gloomy economic forecast and stalled merger talks with Northwest Airlines, Delta will reportedly announce some big changes to its business plan this week.

The Atlanta Journal-Constitution reports Chief Executive Richard Anderson broke the news Friday to employees, some of whom may not have a role in that new plan.

In December, Delta announced it would save $400 million by reducing domestic capacity up to five percent, getting rid of some older planes and eliminating an undisclosed number of jobs, mostly through attrition.

But Anderson says more is needed. "You'll continue to see a more comprehensive plan that we will roll out next week in reaction to changes in the marketplace. At the same time, we're working hard within the revenue environment to rightsize the airline to the marketplace," he said.

Unions hate that term, "rightsize." Anderson said Delta will discontinue several domestic routes that are unprofitable at current fuel prices, try to pass fuel costs onto customers before requiring sacrifices from employees, and will tell workers more next week on its internal web site.

Investors drove airline stock prices lower again Monday on news of stalled airline merger talks and record fuel prices, and expected higher costs for the loans airlines need to buy new aircraft, or each other. Delta closed Monday at a new 52-week low of $9.23 per share.

FMI: www.delta.com

Advertisement

More News

SpaceX to Launch Inversion RAY Reentry Vehicle in Fall

Inversion to Launch Reentry Vehicle Demonstrator Aboard SpaceX Falcon 9 This fall, the aerospace startup Inversion is set to launch its Ray reentry demonstrator capsule aboard Spac>[...]

Aero-News: Quote of the Day (04.23.24)

"We are excited to accelerate the adoption of electric aviation technology and further our journey towards a sustainable future. The agreement with magniX underscores our commitmen>[...]

Aero-News: Quote of the Day (04.20.24)

"The journey to this achievement started nearly a decade ago when a freshly commissioned Gentry, driven by a fascination with new technologies and a desire to contribute significan>[...]

ANN's Daily Aero-Linx (04.20.24)

Aero Linx: OX5 Aviation Pioneers Each year a national reunion of OX5 Aviation Pioneers is hosted by one of the Wings in the organization. The reunions attract much attention as man>[...]

Aero-News: Quote of the Day (04.21.24)

"Our driven and innovative team of military and civilian Airmen delivers combat power daily, ensuring our nation is ready today and tomorrow." Source: General Duke Richardson, AFMC>[...]

blog comments powered by Disqus



Advertisement

Advertisement

Podcasts

Advertisement

© 2007 - 2024 Web Development & Design by Pauli Systems, LC