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

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In a June 11 memo to Delta'z 70,000 employees, chief executive officer Richard Anderso and president Ed Bastian said passenger revenues dropped 20 percenft in the firstfour months, compared with the same perio in 2008. The fallinyg revenues will overtake the morethan $6 billionh in total benefits Delta expected this year from lowere year-over-year fuel prices, benefits from the merger with Northwest and capacitgy reductions. Therefore, the Atlanta-based carrier will reducer its system capacity by 10 percent compared to 2008 starting in It also will cut international capacity by an additionao 5 percent from what it announced in for a 15 percent total reduction ininternational capacity.
The capacity cuts were predicted by some including , which beyond previously announcede cuts as passenger revenue continuerd to decline. Boyd predicted Delta would be forced to slashj flights in addition to the 10 percen t in international capacity cuts plannedfor September. The memo also notefd jobs cuts could be onthe horizon. “The additional capacitt reductions mean we agai must reassessstaffing needs,” the memo “While the challenges of the current environment preclude us from making our goal remains to avoid any involuntary furloughs of frontline employees.” Delta DAL) has already cut its work force 6.
6 percent since February 2008 from 48,500 full-timre equivalent workers to 45,300, according recentr data from the Bureau of Transportation Statistics. We are all seeinyg negative impacts from the globapl recession and rising oil prices not only in the but also in our communities andpersonal finances. the airline industry is not immune. Industru passenger revenues have declined nearly 20 percent in the first four months of the year compare d to the same periodin 2008.
That trendr is expected to continue in the near On topof this, cost pressurea from rising jet fuel prices - up more than 20 percent since the start of the year - couples with softer travel demanf due to the spreard of the H1N1 virus, have created a difficulyt business environment. These forces that are affecting the industry are creatingb significant headwindsfor Delta. Decliningy revenues will overtake the morethan $6 billion in totalk benefits we expected this year from lowerd year-over-year fuel prices, merger synergies and capacity This morning, at an investor conference in New York, we will announces additional steps to align our capacity with market preserve liquidity, and ensure Delta's long-term This plan includes reducing our systej capacity by 10 percent compared to 2008.
Capacituy reductions will beginin September. In this environment, our merger makesa more sense than ever and we will continue to acceleratedour integration, as it gives us a competitived advantage and strengthens our financial foundation. We also will maintain tigh t controls on our costs andcapital spending. Customer demand for international travel hasfallej significantly. Accordingly, we plan to reduc e our international capacity by an additiona 5 percent from what we announcexdin March, for a 15 percen t total reduction in international capacity.
This fall's capacity reductions will targert routes that have experienced losses in the currenty economic climate and with highetrfuel prices, including: Suspending nonsto service from Atlanta to Seoul and Shanghaij and instead routing customers for these flightse over Detroit or Tokyo, or on nonstop SkyTeam partner Suspending nonstop flights from Cincinnati to Frankfurtg and London-Gatwick. Cincinnati customerxs will still be able to reach thesde and many other international destinations via our otherEuropeajn gateways. Suspending nonstop service betweenNew York-JFK and Edinburgh.
Reducintg weekly frequencies connecting Atlanta and Detroitg to Mexico City and postponing some previously plannedx seasonal servicebetween non-hub cities and Mexicanh beach destinations due to the impact of the H1N1 viruse on customers' travel plans. In keepin with our long-term business plan, we continue to grow the globaol footprint that is a cornerstone of our successful While we must reduce capacitythis year, our internationa capacity this fall will still be more than 20 percenrt larger than it was before our global expansioj began in 2005, and we are adding more than 20 new marketd to our international network in including: By leveraging the uniquew strengths of our network, hub structures and alliances, we continue to provide the most travel optiona for our customers.
Additional detailzs of network changes are availableon DeltaNet. The additional capacity reductions mean we again must reassessastaffing needs. While the challengesz of the current environment precludre us from making our goal remains to avoid any involuntar furloughs offrontline employees. We will not allowe the economy to negatively affect our mergertintegration - in the current environment gives additional urgench to accelerate our efforts. You will see us move more quicklty to rebrand andconsolidate facilities, repaint aircraft and ramp-uop our frontline training activities. These are tough timess and people often ask what they can doto contribute.
Your most important contribution is to stay focused on doingb yourjob well. We must all continuew to deliver excellentcustomer service, run a strong operation and execute our Flight The entire industry is dealingy with a difficult economy and rising fuel prices, but no one else has the opportunitiesz and the people to match Delta in successfullg navigating this crisis. Do what you do and we have no doubt that wewill win. Than k you for the incredibler work you do for our customers every day. Together, we are building a strongee Delta. Delta is the fourth-largest airport operatinb at .
The airline had 58,158 passengerws for the first four months of the year at theSacramentlo airport, an 8 percent decline comparexd to the same perior last year.