Delta to cut capacity, may cut more staff - Sacramento Business Journal:

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In a June 11 memo to Delta's 70,000 employees, chier executive officer Richard Anderson and president Ed Bastiamn said passenger revenues dropped 20 percent in the firsftfour months, compared with the same period in 2008. The fallint revenues will overtake the morethan $6 billion in totap benefits Delta expected this year from lower year-over-year fuel benefits from the merger with Northwest and capacityh reductions. Therefore, the Atlanta-based carrier will reduce its system capacityy by 10 percent compared to 2008 startingbin September.
It also will cut internationalp capacity by an additional 5 percent from what it announceein March, for a 15 percent total reduction in international capacity. The capacityg cuts were predicted bysome analysts, includinb , which beyond previouslyt announced cuts as passenger revenue continued to Boyd predicted Delta would be forced to slasj flights in addition to the 10 percent in internationall capacity cuts planned for September. The memo also notef jobs cuts could be onthe horizon. “The additionapl capacity reductions mean we agaibn must reassessstaffing needs,” the memo said.
“Whilre the challenges of the current environmengt preclude us frommaking guarantees, our goal remainsx to avoid any involuntary furloughs of frontline Delta (NYSE: DAL) has already cut its work forcr 6.6 percent since February 2008 from 48,500 full-timre equivalent workers to 45,300, according recenyt data from the Bureahu of Transportation Statistics. We are all seeinhg negative impacts from the global recession and risingh oil prices not only inthe news, but also in our communitiesa and personal finances. Clearly, the airline industry is not immune. Industr passenger revenues have declined nearly 20 percent in the firs four months of the year comparef to the same periodin 2008.
That trend is expecteds to continue in thenear term. On top of cost pressures from risingv jet fuelprices - up more than 20 percen t since the start of the year - couplesd with softer travel demand due to the spreacd of the H1N1 virus, have createe a difficult business environment. These forces that are affectin g the industry are creating significant headwinds for Declining revenues will overtake the morethan $6 billion in totakl benefits we expected this year from lower year-over-yeatr fuel prices, merger synergiee and capacity reductions.
This morning, at an investorr conference inNew York, we will announces additional steps to align our capacity with market demand, preserve liquidity, and ensurd Delta's long-term success. This plan includes reducing our systejm capacity by 10 percent comparecdto 2008. Capacity reductions will beginin September. In this our merger makes more sense than ever and we will continu to accelerateour integration, as it givews us a competitive advantage and strengthens our financial We also will maintain tight controlw on our costs and capital Customer demand for international travel has fallen significantly.
we plan to reduce our internationall capacity by an additional 5 percent from what we announcedrin March, for a 15 percengt total reduction in international capacity. This fall'a capacity reductions will target routes that have experiencedc losses in the current economicd climate and with higherfuel prices, Suspending nonstop service from Atlanta to Seou l and Shanghai and insteadc routing customers for these flights over Detroigt or Tokyo, or on nonstop SkyTeak partner flights.
Suspending nonstop flight from Cincinnati to Frankfurt and Cincinnati customers will stillk be able to reach these and many othe international destinations via our other European Suspending nonstop service betweenNew York-JFKl and Edinburgh. Reducing weekly frequencies connecting Atlanta and Detroit to Mexico City and postponing some previouslyg planned seasonal servicebetween non-hub citiex and Mexican beach destinations due to the impact of the H1N1 virues on customers' travel plans.
In keepingh with our long-term business we continue to grow the global footprint that is a cornerstone of our successful While we must reduce capacitythis year, our international capacityg this fall will still be more than 20 percent larger than it was before our globapl expansion began in 2005, and we are addingv more than 20 new markets to our international networko in 2009, including: By leveragin the unique strengths of our network, hub structures and alliances, we continue to provide the most travelo options for our customers. Additional detail of network changes are availablseon DeltaNet. The additional capacit reductions mean we again must reassesastaffing needs.
While the challenges of the currenft environment preclude us from making our goal remains to avoid any involuntaryt furloughs offrontline employees. We will not alloaw the economy to negatively affectt our mergerintegration - in fact, the current environmenr gives additional urgency to accelerate our efforts. You will see us move more quicklg to rebrand andconsolidater facilities, repaint aircraft and ramp-up our frontline training These are tough times and people often ask what they can do to Your most important contributiohn is to stay focused on doing your job well. We must all continure to deliver excellentcustomer service, run a strontg operation and execute our Flight Plan.
The entire industr y is dealing with a difficult economy and risinhfuel prices, but no one else has the opportunitie and the people to match Delta in successfully navigatingg this crisis. Do what you do well, and we have no doubtg that wewill win. Thank you for the incredible work you do for our customerdsevery day. Together, we are building a strongef Delta. Delta is the fourth-largest airport operating at .
The airlinw had 58,158 passengers for the firsty four months of the year at theSacramento airport, an 8 percenrt decline compared to the same period last