The article below from NYTimes.com has been sent to you by psa188@xxxxxxxxx /--------- E-mail Sponsored by Fox Searchlight ------------\ I HEART HUCKABEES - OPENING IN SELECT CITIES OCTOBER 1 From David O. Russell, writer and director of THREE KINGS and FLIRTING WITH DISASTER comes an existential comedy starring Dustin Hoffman, Isabelle Hupert, Jude Law, Jason Schwartzman, Lily Tomlin, Mark Wahlberg and Naomi Watts. Watch the trailer now at: http://www.foxsearchlight.com/huckabees/index_nyt.html \----------------------------------------------------------/ Delta to Cut Up to 7,000 Jobs September 8, 2004 By MICHELINE MAYNARD Delta Air Lines said today that it would cut 6,000 to 7,000 jobs over the next 18 months as part of a sweeping restructuring plan that the airline said would save $5 billion a year in costs by 2006. In doing so, the airline said its financial situation was rapidly deteriorating, and warned bankruptcy was "a real possibility," - its strongest statement yet on its prospects. The airline said it would work quickly to avoid a Chapter 11 filing and put renewed pressure on its pilots union to grant $1 billion in wage and benefit concessions. Delta, which outlined the plan at its Atlanta headquarters, said it was sparing Song, its low-fare operation, whose demise had been widely rumored. Instead, Delta said it would add 12 aircraft to Song's fleet of lime green and gray Boeing 757's. At the same time, the airline said it planned to eliminate as many as four types of aircraft, and would dismantle its hub in Dallas. Delta's announcement came after a nine-month study of its operations commissioned by Gerald A. Grinstein, who took charge as chief executive in January. Delta, the nation's third-biggest airline behind American and United, has warned repeatedly in recent months that it was in danger of a Chapter 11 filing if it was unable to cut its costs and clean up its balance sheet. The airline has lost $5.6 billion since 2001. It has blamed high fuel costs, heated competition from low-fare airlines that prevent it from raising ticket prices, its heavy debt burden and uncompetitive labor costs. The airline is saddled with more than $20 billion in debt, and has seen its cash balance drop from $2.7 billion at the end of 2004 to $2 billion at the end of the second quarter. Mr. Grinstein, in announcing the plan, mentioned another issue: early retirements by Delta's pilots. Already this year, the airline has taken a $1.65 billion non-cash charge, in part to account for departures by its pilots, who are the highest paid in the airline industry, and the airline said further charges were likely in the third and fourth quarters. Today, Delta said that it was faced with "a possible operational disruption" from more early retirements, meaning it may not have enough employees to fly its planes. About 2,000 of Delta's 6,900 pilots are eligible to retire early. Taken with all its other problems, that meant bankruptcy was "a real possibility," Mr. Grinstein said. "We're working hard and fast to avoid it," he said, but if Delta could not resolve the early retirement situation in the next month and all the other issues could not be attacked, "We will have to restructure through the courts," he said. Delta and the Air Line Pilots Association exchanged proposals this summer, with the pilots union suggesting cuts of $600 million to $705 million and the company insisting on more. No new talks are scheduled. Mr. Grinstein said the job cuts would be accompanied by a 15 percent reduction in management overhead, and other wage and benefit cuts that he did not specify. The airline said it planned to restructure 51 percent of its flights by the end of January, resulting in the biggest one-day schedule change in its history. Echoing steps taken by US Airways, which is struggling to avoid a second bankruptcy filing, Delta said it would emphasize operations in Boston, at Kennedy Airport in New York, in Fort Lauderdale, Tampa and Orlando in Florida, and in Columbus, Ohio. The first five cities are all served by Song, the low-fare airline that Delta started last year in an effort to compete with JetBlue and other airlines offering cheap fares from the Northeast to Florida. Mr. Grinstein said Song would get 12 new planes by late next spring, on top of its fleet of 36, essentially resuming an expansion of the brand that was delayed by the restructuring plan. Delta said it would dismantle its hub at Dallas-Fort Worth, which is dominated by American Airlines and which also has seen a rise in low-fare competition in recent months. "A commanding presence market presence is critical and we didn't have it in Dallas," he said. Delta said it would sustain its hubs in Salt Lake City, Cincinnati and Atlanta, where it plans extensive efforts to streamline its schedules. Delta recently announced that it was cutting fares in Cincinnati, where it is losing 2,800 passengers a day to airports in Dayton, Ohio, and in Louisville and Lexington, Ky., served by low-fare competition. http://www.nytimes.com/2004/09/08/business/08CND-AIR.html?ex=1095658336&ei=1&en=7b7bc1fe2f8e2d43 --------------------------------- Get Home Delivery of The New York Times Newspaper. Imagine reading The New York Times any time & anywhere you like! Leisurely catch up on events & expand your horizons. Enjoy now for 50% off Home Delivery! 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