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9/9/2004

Delta to cut up to 7,000 jobs; bankruptcy possible

The Associated Press

ATLANTA — Delta Air Lines is axing up to 7,000 jobs, cutting employee wages and shedding its Dallas hub as part of a sweeping turnaround plan aimed at helping the nation’s third-largest carrier cope with high fuel costs and competition from low-fare rivals.
But even with those changes — part of a $5 billion cost-saving program — CEO Gerald Grinstein warned Wednesday that Delta would seek bank-ruptcy court protection if Delta can’t slow the pace of pilot retirements by the end of September.
Grinstein told reporters that he fears pilots could jump ship en masse because they are worried about their pensions and keenly aware of UAL Corp.’s threat to terminate the employee retirement plans at its United Airlines unit. Several hundred Delta pilots have retired early in recent months, and more have threatened to do so, he said.
“We have to know what we’re dealing with before the end of the month,” Grinstein said, after delivering a speech to 300 middle managers that was broadcast on the Internet.
The normal pilot retirement age at Delta is 60. Senior pilots with enough years of service can retire early at age 50, and roughly 2,000 are currently eligible, Grinstein said. If that many retired early, it would hurt Delta’s ability to operate the international flights that many of its senior pilots handle, Grinstein said.
Pilots union spokesman Chris Renkel said pilots would be less likely to retire early if Atlanta-based Delta Air Lines Inc. would heed the union’s request for the company to promise not to try to take away any employees’ accrued benefits.