graphic
News
Delta to cut 13,000 jobs
September 26, 2001: 12:54 p.m. ET

No. 3 U.S. airline to cut 15% of flight schedule, hurting N.Y., Florida markets
graphic
graphic graphic
graphic
NEW YORK (CNNfn) - Delta Air Lines, the nation's third-largest airline, announced plans Wednesday to cut about 13,000 employees, or about 16 percent of its staff.

The airline also will cut its flight schedule by 15 percent from its pre-terrorist attack levels, including a 50 percent drop in its Delta Express operation that primarily serves the Florida vacation market.

graphic  
The airline is the last of six major carriers in the country to announce staff cuts that now approach 100,000 across the industry as a whole. Of the nation's major carriers only No. 7 Southwest Airlines (LUV: down $0.02 to $14.04, Research, Estimates), the industry's most profitable company before the Sept. 11 terrorist attack, has avoided announcing layoffs.

The first cuts at Delta will take place Nov. 1, and they should be completed by Dec. 31. The airline is hopeful that most but not all of the reduction will be accomplished through a series of voluntary departure programs, including buyouts, early retirement and long-term leaves.

Airline cutting fares, other costs

Delta said it also will be discounting tickets in an effort to attract customers back to its planes. Despite a reduced schedule the airline is filling only about 33 to 35 percent of its seats, about half the capacity needed to break even, Delta CEO Leo Mullin told reporters Wednesday.

graphic   VIDEO  
graphicLeo Mullin, chairman of Delta Air Lines, announces job cuts.
Real 28K 80K
Windows Media 28K 80K
Some key routes have been hit even harder. The Delta Shuttle, which flew between New York's LaGuardia Airport and Ronald Reagan National Airport in Washington, has been shifted to Washington Dulles, much farther away from the city, due to the continued closure of National. Mullin said it carried only 200 passengers Tuesday rather than the typical 3,000.

"We absolutely will be cutting prices, using all types of innovative techniques to get [passengers] back," he said. Among the programs being considered is 10,000 free or extremely low-priced tickets to get people to visit New York, Mullin said, although details of that offer were not immediately available.

graphic  
Delta's reductions at New York's Kennedy International Airport are among the steepest, with flights halted through at least next March from JFK to nine overseas cities, including such major destinations as Tokyo, while service to Stockholm, Sweden, has been suspended indefinitely.

Delta is considering other cost-cutting efforts, including reducing or elimination meal service and delaying or canceling delivery of some new aircraft. Delta also may use lower-cost, smaller, regional carriers flying under the Delta Connection name to serve some markets now served by mainline Delta jets.

Mullin also became the second major airline CEO to announce he would not be paid for the remainder of the year, following the move announced Monday by Donald Carty, CEO of AMR Corp. (AMR: down $0.42 to $18.22, Research, Estimates), owner of American and Trans World Airlines.

Variety of voluntary departure programs offered

Delta, which has less union representation than most of its competitors, said it is offering employees six different voluntary separation programs, including early retirement, voluntary leaves of one to five years duration, and a voluntary severance package. The airline said it hopes the voluntary programs will account for most of the projected job reductions, and that involuntary layoffs will include an industry-leading severance package as well.

"There is no expectation we will get the full 13,000 through the voluntary method," Mullin said, adding those who are involuntarily laid off will receive between four and 20 weeks of pay, depending on seniority.

Click here for a look at airline stocks

Delta had been facing union organizing efforts among its mechanics and flight attendants even before the Sept. 11 terrorist attack. The only union currently representing its employees, the Air Line Pilots Association, issued a statement saying the cut of up to 1,700 pilots, "greatly concerns but does not surprise us." It said it would examine management's plans before making further comment.

Shares of Delta (DAL: up $0.38 to $24.90, Research, Estimates) were slightly higher in morning trading Wednesday ahead of the official announcement. graphic

  RELATED STORIES

Continental jobs cuts will cost $60M - Sep. 26, 2001

Delta cutting 13,000 jobs - Sept. 26, 2001

Airline losses could ground U.S. economy - Sept. 21, 2001

American parent and United to cut 20,000 jobs - Sept. 19, 2001

Airline executives warn of bankruptcies - Sept. 19, 2001

Airline stocks see steep selloff - Sept. 17, 2001

Continental slashes staff, flights - Sept. 15, 2001

Losses widen for airlines - July 18, 2001

  RELATED SITES

Delta Air Lines


Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney




graphic

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.