Delta Cuts Capacity in Response to Downturn

Delta Air Lines, the world's largest carrier, said Tuesday it would cut its international capacity by an additional 10 percent starting in September as the global economic downturn batters the industry.

Delta said its cuts would target its Atlantic and Pacific networks, which have seen the most revenue weakness. The cuts are in addition to the systemwide 6-8 percent capacity cuts announced in December.

Delta said its trans-Atlantic capacity this winter would be down 11-13 percent compared to the winter of 2008, while its trans-Pacific capacity would be down 12-14 percent.

AP

The airline industry is grappling with weaker travel demand as economies sag around the world. Carriers slashed capacity in the second half of 2008 to compensate for volatile fuel prices and falling demand.

The new round of downsizing means Delta must "reassess our staffing needs," the company said. The carrier has eliminated 2,100 jobs through voluntary exit programs and hopes to achieve its next target also through voluntary outs. Delta has more than 70,000 employees.

Delta also said it expects its first-quarter operating margin to be down 6-7 percent. Excluding one-time items, the carrier said it sees its first-quarter operating margin down 5-6 percent. Delta said it expects to end the first quarter with a liquidity position of $4.4 billion.

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