=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/n/a/2008/06/19/financial/= f034244D31.DTL --------------------------------------------------------------------- Thursday, June 19, 2008 (AP) Delta to cut more US capacity due to fuel costs By HARRY R. WEBER, AP Business Writer (06-19) 03:42 PDT ATLANTA (AP) -- Delta Air Lines Inc. plans to cut domestic capacity by an extra 3 percent in the second half of this year due to record fuel prices. The Atlanta-based company disclosed its plans in a regulatory filing, and president and chief financial officer Ed Bastian discussed the capacity cuts later Wednesday during the Merrill Lynch Global Transportation Conference in New York that was broadcast on the Internet. The airline will cut domestic capacity by 13 percent during the second half of the year, an increase from the 10 percent reduction announced in March. Bastian suggested at the conference that Delta's domestic capacity cuts won't end there. "We have flexibility to do more, and we will do more," he said. He said further reductions could be warranted in 2009 on Delta's regional carrier side. Delta, which plans to acquire Eagan, Minn.-based Northwest Airlines Corp= ., estimates fuel costs this year will be $4 billion more than last year. The airline expects to post a profit in the second quarter, excluding one-time items. Delta forecast $3.2 billion in unrestricted liquidity at the end of 2008, down $600 million from the end of 2007. The total amount Delta cited includes a $1 billion undrawn credit line. Bastian hinted that Delta will be looking at unspecified cash-raising opportunities in the future, but wants to complete the Northwest acquisition first. There has been speculation Delta could sell its regional subsidiary, Comair. Delta has said only that it is considering shedding the unit. Delta shares fell 28 cents, or 4.9 percent, to close at $5.45 on Wednesday. Several major carriers have announced plans to cut domestic capacity by double-digit margins as the price of oil soared to more than $134 a barrel, about twice what it was a year ago. Others are adding new fees for passengers and cutting jobs. Delta will shed about 4,000 jobs. Delta expects its job cuts to result in $200 million in annual cost savings. Bastian said the affected employees will leave Delta as of Oct. 1. While Delta is cutting domestic capacity, it continues to increase international capacity. The carrier said Wednesday that international capacity will be up 14 percent in the second half of the year, compared with the same period a year ago. Bastian said Delta hopes to complete its acquisition of Northwest in November or December. The deal, which Delta believes is more important now than ever because of high fuel prices, is subject to shareholder and regulatory approval. In a separate address to investors at the Merrill Lynch conference on Wednesday, the chief executive of Orlando, Fla.-based AirTran Airways, which has its hub in Atlanta, said his company also plans to cut domestic capacity to deal with high fuel prices. In April, the discount carrier said it was suspending its expansion plans beginning in September 2008 and extending through 2009. It said the result would be no more than flat capacity growth year-over-year. AirTran now expects a 5 percent reduction in capacity year-over-year. CEO Robert Fornaro said AirTran's primary goal is to adapt to high fuel prices. "We've been through adversity before and our culture responds to it, and= I assure you we will do it again today," Fornaro said. AirTran said previously it will put off buying 18 Boeing 737-700 planes for up to five years. AirTran shares fell 8 cents, or 3.2 percent, to close at $2.45. Earlier = in the session they hit a new low of $2.33. ___ On the Net: Delta Air Lines Inc.: www.delta.com AirTran Airways: www.airtran.com ---------------------------------------= ------------------------------- Copyright 2008 AP <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> If you wish to unsubscribe from the AIRLINE List, please send an E-mail to: "listserv@xxxxxxxxxxxxxxxxx". Within the body of the text, only write the following:"SIGNOFF AIRLINE".