Delta to cut 9000 jobs and slash $3bn of costs
24.09.05
Delta Air Lines is to cut up to 9000 jobs - or 17% of its workforce - to help reduce its costs by $3 billion. In the wake of its move into Chapter 11 bankruptcy protection last week, the airline says reducing employee and executive pay will help it return to profitability in 2 years.
The plan to reduce costs and boost revenues by $3 billion annually by the end of 2007 is on top of the $5 billion cutbacks targeted for next year. The third largest US carrier says it will cut employees pay by up to 10%, and reduce chief executive Gerald Grinstein’s compensation by 25%.
'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,' Grinstein said. The airline, which posted losses of almost $10 billion in the past 4 years, is looking to save $325 million in annual wage and benefit reductions from its pilots.
Delta also plans to reduce its US flight capacity by up to 20%. At the same time, the airline plans to increase international capacity by up to 25% next year.
Meanwhile Northwest Airlines, who filed for bankruptcy on the same day as Delta, is to lay off 1400 flight attendants and 400 pilots between October 31 and January 2006. US airline layoffs have reached 44,000 already this year, according to outplacement firm Challenger, Gray & Christmas.
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