Safe you Finance

Facing record-high fuel costs and a weakening economy, Delta Air Lines and other carriers on Tuesday made moves to cut costs.

Delta said it will park twice as many planes as it planned and offer buyouts to 30,000 employees. Delta hopes to cut 2,000 non-pilot jobs in the United States, or 3.6 percent of its work force, through buyouts and voluntary retirements for which more than half of employees qualify, Chief Financial Officer Ed Bastian said. As many as 45 jets will be grounded as flights and routes shrink, he said.

Delta, which emerged from bankruptcy in April and has been in merger talks with Northwest Airlines Corp., is struggling with an 87 percent surge in fuel prices in the last year. The third-largest U.S. carrier said this year’s jet-fuel bill will be $2 billion higher than last year’s.

Other U.S. airlines disclosed less-dramatic moves. United Airlines parent UAL Corp. said it plans to pull as many as 20 older and less-efficient aircraft from its fleet to lower costs, and JetBlue Airways Corp. said it will sell four more Airbus SAS A320 aircraft, bringing the number of jets it’s shedding to 10.
Northwest said its U.S. passenger capacity will be "significantly smaller" this quarter and that further cuts may occur in August or September freecreditreport.

AMR Corp.’s American Airlines, the world’s largest carrier, said it’s reviewing 2008 capacity plans again, just a month after lowering them.

The moves come as airlines face a flood of red ink. The nine biggest U.S. airlines probably will lose a total of $1.5 billion this year, Merrill Lynch & Co. analyst Michael Linenberg said.

Delta plans to reduce its domestic passenger capacity 10 percent by August, double the 5 percent reduction the carrier previously targeted. The cuts include reducing the frequency of flights and cutting unprofitable routes. That will affect as many as 20 mainline jets and 25 regional aircraft, Bastian said.

About 1,300 of the jobs Delta plans to cut will be so-called frontline workers who handle ticketing, baggage and other operations, with the remainder coming from management, Bastian said.

Delta had the equivalent of 55,044 full-time employees at the end of last year.

Source