Recession-hit Delta Air Lines to cut more management jobs, capacity

Delta Air Lines, headquartered in Atlanta, Georgia, the United States, has announced that it is planning to cut more jobs in the management and administrative segments of the company. However, Delta Air Lines, the biggest airline operator in the world, did not disclose the number of jobs it will do away with.

The carrier also is cutting more capacity in its efforts to cope with the global economic depression.

Richard Anderson, chief executive, and Ed Bastian, president of Delta Air Lines, said in a message to the employees that the airline’s revenues have been dropping by “billions of dollars” on account of the weak economy and the decline in the demand for air travel.

In their message to the employees, Richard Anderson and Ed Bastian stressed that the company required to be “more aggressive” with regard to “saving money” in its administrative as well as management budgets.

This goal will be achieved through budget reductions, including cuts in vendors and professional services, they added.

Owing to the gravity of the economic downturn, Delta Air Lines is also compelled to cut additional salaried positions beyond the management and administrative jobs, which have been done away with over the last 18 months, Richard Anderson and Ed Bastian told the employees.

They explained that the “painful action” is being reported to in an effort to help Delta maintain its competitive position as “a strong and viable airline for its employees, shareowners as well as customers.”

Delta Air Lines said in a recent regulatory filing that the company – including its subsidiaries Northwest Airlines as well as the regional carriers Mesaba, Compass,
and Comair – had 82,968 full-time employees as of June 30, 2009.

In July 2009, Delta Air Lines had announced having suffered a second-quarter loss of $257 million.

The airline’s two top executives informed the employees that the worldwide financial slump, made worse by the impact of the outbreak of the swine flu, had resulted in Delta’s revenues dwindling by over $3 billion for the first six months of 2009.

This amounts to over $40,000 in lost revenue per employee, and the company does not expect that its earnings will increase considerably in the rest of the year, Richard Anderson and Ed Bastian said.

Delta Air Lines says that it is also considering cutting international capacity by 15 per cent from September 2009 and its system capacity by 10 per cent in 2009 compared to
2008.

Airlines reduce capacity – which is measured in available seat miles – through different means such as by using smaller planes on certain routes, taking aircraft off the air, and by cutting the number of frequencies to some destinations.