Dec 2, 2008 4:54 pm US/Mountain
Delta, NWA Cutting Flights To Turn Profit
MINNEAPOLIS (CBS) ―
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According to a memo Delta and Northwest, there will be up to 10 percent fewer inside the country, and up to 5 percent fewer on international flights.
CBS
Finding a flight out of town is about to get more challenging after Delta and Northwest Airlines said Tuesday that next year they're cutting the number of seats significantly, reports CBS station WCCO-TV in Minneapolis.
There will be up to 10 percent fewer inside the country, and up to 5 percent fewer on international flights.
"That's very concerning," said Minnesota State Rep. Debra Hilstrom. She reacted to the latest news from Delta and Northwest Airlines, following a memo from management to all 75,000 airline employees across the world on Tuesday morning.
The only way to cut seats is to cut flights, and that's exactly what an expert said will happen.
Richard Anderson and Ed Bastian wrote in the memo, "This action comes as a result of the global economic recession and weaker demand for air travel."
The airlines also talked about cutting jobs.
Just two weeks ago, Delta's General Counsel testified at a state hearing chaired by Hilstrom where he gave her the first round of bad news.
"They told us that the job numbers could drop below 10,000 jobs ... That's very, very concerning," said Hilstrom.
After reading the memo, she's worried the number will go even lower. The memo makes it clear airline management will offer voluntary programs to adjust staffing needs, but it doesn't specifically say which jobs will be cut.
The memo from the CEOs said, "We are taking these actions to secure your careers and return us to sustained profitability."
With the economy in the dumps, experts warn that people have less extra income to spend on vacations, so they're not going to fly. Businesses are also being sensitive to the travel budget.
Experts say that's why airlines are planning their next moves now, anticipating more turbulence ahead.
Delta's president also talked about how much cash the airline will have at the end of this year: $5.6 billion. He called it a "solid cash balance."
But even so, he talked about how the airline's looking at several ways to raise more cash, and details about that will come out in another week.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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