Wednesday, August 07, 2002

Pay, jobs safe; but Delta says other cuts possible

By James Pilcher,
The Cincinnati Enquirer

        The head of Delta Air Lines has told the carrier's employees not to expect further pay or job cuts, but he warned that other benefits such as health care could be reduced as the airline industry continues to struggle in the post-Sept. 11 environment.

        In an internal memo obtained by the Enquirer, Delta chairman and chief executive officer Leo Mullin said the airline has “no plans to undertake anything currently that resembles the size of those steps,” referring to the 10,000-plus jobs that were eliminated last fall, soon after the attacks pushed all carriers into a deep swoon.

        “Yet we do need to include employee issues in the effort to return to profitability that is so essential. Most likely, we will need to make some modifications to Delta's benefits,” Mr. Mullin said.

        Delta, the nation's third-largest carrier, operates its second-largest hub at the Cincinnati/Northern Kentucky International Airport, where it employs about 6,500 workers. The company reported a $186 million loss for the second quarter alone, pushing losses for the year to $562 million. It employs about 60,000 workers systemwide.

        In the memo, Mr. Mullin characterized the airline's benefits program as one of the nation's best, but it said “it is also very expensive — especially the health-care plan.”

        Delta officials would not comment on potential cuts of any kind.

        Officials at Comair, Delta's Erlanger-based regional subsidiary which employs about 3,500 locally, also would not comment. But Comair executives have previously said there were no planned cuts anywhere.

        Mr. Mullin also said Delta had been in touch with other domestic carriers to discuss a potential partnership that would allow each airline to sell seats on the other's planes under their own name, an industry practice known as code-sharing.

        He wrote that “it is clear that we are the target” of a proposed new code-sharing agreement between United Airlines and US Airways, which was at the heart of both airlines' recent request for federal loan guarantees. Those requests were approved.

        Mr. Mullin also said Delta would fight back through its own partnerships or other competitive means, and that “either way, our intention would be to more than offset the impact of a US Airways/United arrangement.”

        Delta spokeswoman Kristi Tucker would not comment specifically on Mr. Mullin's statement but said the airline “will consider any and all options should the competitive marketplace change.”

        Deep-discount tickets go on sale today

        Delta Air Lines said Tuesday it was launching a two-day fare sale today on international trips to help spur late-summer leisure trips.

        The sale, which begins at 5 a.m. and ends at midnight Thursday, includes deep discounts on several international destinations from Cincinnati/Northern Kentucky International Airport.

        For example, a coach round-trip ticket for a direct flight from Cincinnati to London's Gatwick airport had cost $928 but now costs $464 through late fall. and $410 for Christmas through March.

— James Pilcher


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