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Wednesday November 19, 2008
Reuters
Delta To Announce Pay, Benefit Cuts This Week

The chief executive of Delta Air Lines on Monday said that the carrier would notify staffers of cuts in pay and benefits this week as it wades through bankruptcy.

"What you'll hear this week will be changes in benefits, pay and work rules," Delta CEO Gerald Grinstein said after speaking before the Georgia Senate Finance Committee in Atlanta.

Grinstein told the Senate panel that Delta, which has cut thousands of jobs in recent years, also plans more layoffs, but he did not give figures, saying the company was in talks to determine the number of planes it would keep or give up.

Delta and Northwest Airlines filed for Chapter 11 bankruptcy protection last week after losing an uphill battle with climbing oil prices and lower-cost rivals. Delta told the Georgia senators it was now paying about USD$1.5 billion more in fuel costs than it was a year ago.

Grinstein said Atlanta-based Delta planned to shrink its domestic service while expanding its international service. The company said it would use more wide-body planes on global routes.

"We expect to build up additional flying, particularly in the international sector, from Hartsfield-Jackson (Atlanta Airport)," Grinstein said. "It is the crown jewel in our system and will continue to be."

There is a "reasonably good chance" that Delta could maintain its pension plan if the airline were allowed to spread out the funding over 25 years, he said, but "it is a risk."

While the US government provided funds to help airlines after the September 11, 2001, attacks, Grinstein said he now senses "airline fatigue" among federal lawmakers in the wake of other problems.

"I don't think there are going to be any steps to make significant changes in federal law that would affect the competitiveness of the airlines," he said.

(Reuters)

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