From Deseret News archives:

Delta plans wage cuts, layoffs of up to 9,000

Published: Thursday, Sept. 22, 2005 11:43 p.m. MDT
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Delta Air Lines Inc. said Thursday it will cut as many as 9,000 jobs — or 17 percent of its work force — over the next 18 months and reduce employee pay and benefits as part of its two-year plan to bring the beleaguered airline back to profitability.

Delta did not specify how or if the wage and staffing adjustments will affect its Utah operations or the 3,900 workers at its Salt Lake City hub. The plan, announced in a memo to Delta employees, is expected to deliver $3 billion in annual financial benefits by year-end 2007 — on top of the $5 billion already slated for next year.

Of that $3 billion, $930 million is expected to come from reduced employment costs: $325 million from Delta pilots and $605 million from the airline's non-pilot work force.

"The final number of positions eliminated will depend upon changes to our fleet," Gerald Grinstein, Delta chief executive officer, wrote in the memo. "Our transformation plan will better balance our enterprise and result in a smaller, more formidable Delta by the end of 2007."

A Delta pilot from Ogden, who requested anonymity, said Thursday's announcement wasn't a complete shock but was rather just the worsening of an already-bad situation.

"I can't live on my income," the pilot said. "I've been living a bit on savings. My wife is going back to work. I have my house up for sale."

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The Ogden pilot said he took a 32.5 percent pay cut on Dec. 1, 2004, along with reductions in overtime pay rates and benefits coverage. On Thursday, he said that though he'll likely keep flying for Delta, he's already looking at taking on another job, or possibly going back to school.

"When you get on with an airline, you're basically married to that airline," he said. "If I wanted to go someplace else right now — to a freight hauler like UPS, or even to JetBlue or Southwest — I'd have to start all over again with seniority, and I can't live on that. I've got three kids, a wife and a mortgage. Three dogs. I guess I can get rid of some of those things, the mortgage and the dogs, but the rest I'm keeping."

Grinstein's memo comes one week after Delta, the nation's third-largest air carrier, filed for Chapter 11 bankruptcy protection, citing skyrocketing fuel prices, employment costs and competition from discount carriers like JetBlue Airways and Southwest Airlines Co. Northwest Airlines Corp., with similar concerns, declared bankruptcy the same day.

Delta employees making less than $25,000 per year aren't expected to see further wage cuts, Grinstein said. On average, employees making more than that can expect wage cuts between 7 percent and 10 percent.

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