Delta Air Lines and American Airlines announced job reductions

Delta Air Lines and American Airlines announced additional capacity and job reductions in the second half of 2009, with international flying in particular taking a bigger hit than previously planned, and other US carriers said they are considering further capacity reductions, ATWOnline reported.

DL said the additional capacity cuts will begin in September and reduce its overall system capacity 10% for the full year compared to 2008. International capacity, which it previously said would be cut 10% in the fall, will be lowered 15% year-over-year for the last four months of the year. From September, it will suspend Atlanta-Seoul Incheon, ATL-Shanghai, Cincinnati-Frankfurt, CVG-London Gatwick and New York JFK-Edinburgh flights.

"Customer demand for international travel has fallen significantly," CEO Richard Anderson and President Ed Bastian told employees in a memo. They added, "The additional capacity reductions mean we again must reassess staffing needs." While making no "guarantees," they pledged to try to avoid "involuntary furloughs of frontline employees." DL has said that 2,500 workers accepted the voluntary leave program it offered in January.

AA said it will reduce full-year capacity 7.5% compared to 2008; it previously planned a 6.5% slash. It said second-half 2009 mainline domestic capacity will be 7.5% lower year-over-year, 1 point below prior guidance, and international capacity will be down 5.5%, 3.5 points lower than previously planned.

The carrier said an additional 1,600 jobs will be cut including 1,200 flight service positions. "Capacity discipline has been our mantra for many years," Chairman and CEO Gerard Arpey said, adding, "We think an adjustment to our fall schedule is warranted, so we are making additional cuts beginning in late August."

While other carriers did not announce new cuts, they signaled that second-half capacity reductions may be necessary. Speaking at the Bank of America Merrill Lynch Global Transportation Conference in New York, available via webcast, United Airlines Senior VP-Corporate Planning and Strategy Greg Taylor said, "We're assessing [capacity] day-to-day, and we've demonstrated in the past a willingness to make hard choices and we'll do it again in the second half of 2009 if necessary. . . We have unencumbered aircraft that we could sell or ground if we need to."

Southwest Airlines Chairman and CEO Gary Kelly added, "It's hard to find any bullish view of any kind of turnaround anytime soon."

(Source: Transport Weekly)