- The Washington Times - Wednesday, March 19, 2008

ATLANTA (AP) — Delta Air Lines, faced with a weak economy, dimmer hopes of a combination with Northwest Airlines and record fuel prices that are eating up profits, said yesterday it will offer voluntary severance payouts to roughly 30,000 employees — more than half its work force — and cut U.S. capacity by an extra 5 percent.

Executives at Atlanta-based Delta said in a memo to employees that the airline’s goal is to cut 2,000 front-line, administrative and management jobs through the severance program, attrition and other initiatives.

Delta spokeswoman Betsy Talton said the company would accept more job cuts if more employees than its goal take the voluntary severance. The severance program primarily affects mainline Delta employees. It will not affect Delta pilots, who have a union contract with the company, and employees at Delta regional carrier Comair, which is based in Erlanger, Ky.

One part of the program is for employees who already are eligible for retirement or for those whose age and years of service total at least 60, with 10 or more years of service. The other part of the program is an “early-out” offer for front-line employees — such as flight attendants and gate and ticket agents — with 10 or more years of service and for administrative and management employees with one or more years of service.

Besides severance payments, employees who take the offers also will be entitled to travel privileges and additional benefits to manage career transitions.

Delta had 55,044 full-time employees as of the end of last year. Delta, since 2001, had previously announced it would cut up to 33,000 jobs.

Oil prices recently cracked $111 a barrel, nearly twice what they were a year ago. Delta said that in the past three months, fuel prices have climbed nearly 20 percent and its 2008 fuel bill is expected to increase by more than $2 billion over 2007.

Delta shares rose 55 cents, or 6 percent, to $9.78 in trading yesterday. The company’s stock price has lost more than half its value since Delta emerged from bankruptcy last April.

The memo from Chief Executive Officer Richard Anderson and President Ed Bastian did not mention Delta’s talks with Northwest Airlines Corp. about a combination that would create the world’s largest airline. Mr. Bastian also spoke to investors yesterday at a conference in New York.

“We’re focused on addressing our challenges,” Mr. Bastian said at the conference. “We’re moving quickly. We’re focused on performance.”

LOAD COMMENTS ()

 

Click to Read More

Click to Hide