Delta Air Lines Inc. said yesterday that it will cut as many as 9,000 jobs and reduce employee and executive pay, in the first extensive plan detailing how the company expects to get out of bankruptcy protection.
Pay for most employees will be reduced 7 to 10 percent, and chief executive Gerald Grinstein will take a 25 percent pay cut.
The plan would reduce costs and boost productivity by adding more profitable international flights among other steps, to save $3 billion annually by the end of 2007, the company said.
Delta is eliminating 17 percent of its workforce one year after deciding to cut as many as 7,000 jobs. Soaring fuel costs and competition from discount carriers such as Southwest Airlines Co. forced Atlanta-based Delta and Northwest Airlines Corp. to file for Chapter 11 bankruptcy protection last week.
The plan announced yesterday is in addition to $5 billion in cost reductions and revenue increases the company was planning for next year.
Since 2001, the airline has lost almost $10 billion.
Grinstein's salary this year was reduced to $450,000 a year from the $500,000 he was promised when he took the job, and last year he only took half his pay. Other top executives will take 15 percent pay cuts.
Grinstein said he expects to be a "smaller, more cost-efficient airline" that will be profitable in just over two years. The company said it will share profits with employees in the future.
Delta will reduce its U.S. flight capacity, measured as the miles that available seats are carried, by 15 to 20 percent, and will increase international capacity by 25 percent by next year, the company said.
Eagan, Minn.-based Northwest, the fourth-largest U.S. airline, also moved this past week to lay off 1,400 flight attendants and 400 pilots as it reduces flight hours by 13 percent in bankruptcy.
The two airlines' job cuts, with others made at UAL Corp's United Airlines and US Airways Group Inc., bring total industry job reductions this year to about 44,100, according to Challenger, Gray and Christmas Inc., a New York-based outplacement firm.
That is the most on an annual basis since 100,000 were laid off in 2001 after the Sept. 11 terrorist attacks, the firm said.