In the face of a continuing revenue slump amid the worsening global economic downturn, Delta Air Lines has revealed that it will cut international capacity by an additional 10 percent starting in September, a move that will likely mean more job reductions.CEO Richard Anderson and President Edward H. Bastian released the following memo to it’s 70,000 employees:
“The worsening global economy continues to place additional pressure on the airline industry. In just the few months since we last announced capacity reductions, revenues have weakened, particularly in international markets. Once again, we must move quickly to adjust our capacity and stay in front of demand changes.
This morning at an investor conference in New York, we will announce plans to reduce international capacity an additional 10% beginning in September. These reductions will be targeted to areas where we’ve seen the most revenue weakness - the Atlantic and Pacific networks. Trans-Atlantic capacity this winter will be down 11 - 13% and trans-Pacific down 12 - 14% compared to winter 2008. To achieve these capacity changes, we will exit low performing markets, down-gauge certain routes, adjust frequencies, and move some markets to seasonal service.
We remain focused on our goal to build a diversified, profitable worldwide network. To this end, even as we reduce our Atlantic and Pacific capacity, our Latin America capacity will be up slightly in the fourth quarter, as we take advantage of targeted growth opportunities through new routes and increased frequencies.
These reductions are in addition to the December announcement to reduce systemwide 2009 capacity by 6 - 8% year over year. As a result of the voluntary programs just concluded, nearly 2,100 of our colleagues will be voluntarily leaving over then next several months. While these voluntary reductions met our overall target, there are certain positions and geographic locations where we fell short of achieving the goals of the voluntary programs. With the additional capacity reductions noted above, we again must reassess our staffing needs. As in the past, voluntary programs are always our first consideration to adjust staffing needs.
Our merger provides the silver lining to these turbulent economic times as we begin to see tangible evidence of the benefits of our integration and understand how the merger positions Delta ahead of our competitors. Above all, your focus on executing the Flight Plan and providing superior customer service is our most prized attribute.
We will continue to make decisions that are in the long-term interest of employees, customers, shareholders and the communities we serve. Remaining focused on our 2009 Flight Plan will be key to our success. This will require teamwork from all divisions and departments working toward this common goal. Thank you for the incredible work you do for our customers every day. Together, we are building a stronger Delta.”