Delta chief charts a new flight path

ATLANTA — One sweltering day in June, Delta Air Lines chief executive Gerald Grinstein tried to pep up a crowd gathered to mark the struggling airline's 75th anniversary. His best shot: the tale of how Delta overcame disaster when the stock-market crash of 1929 grounded its first attempt to evolve from crop dusting to carrying passengers.

Seven months after taking over as CEO of the third-largest U.S. airline, which operates a hub at Salt Lake City International Airport, the 72-year-old Grinstein is working feverishly to save Delta from catastrophe again. Already in trouble before the Sept. 11 attacks and in near free-fall since, Delta has had losses of more than $5.6 billion over the past three years and racked up $20.6 billion in debt. If it keeps burning through cash at its current rate of more than $4 million a day, it may be forced to file for bankruptcy in the fall, according to internal company calculations.

Like his rivals at the other traditional carriers, Grinstein has improved Delta's efficiency by taking a careful look at low-cost Southwest Airlines. But instead of simply hoping that customers won't notice the cuts, Grinstein is pairing them with service improvements, aiming to chart a new flight path for a profitable full-service airline. In a time when plane tickets have become largely a price-driven commodity, he wants to take a page from Starbucks and customize the flying experience on Delta to justify charging a modest premium.

Many specifics of Grinstein's plans remain closely guarded, and he declined to be interviewed. But according to people familiar with his thinking and to accounts of recent discussions among senior management and investors, Grinstein has plans to gamble Delta's future on an unusual strategy. It would cede some market share in the United States; increase spending to improve customer service and amenities; and, most radically, focus Delta on tapping the last truly rich vein of passenger aviation: flights across the Atlantic, to Latin America, and between the East and West coasts. Those long routes are the last passenger-airline sector in which major airlines have held their own against low-cost competitors, and where more passengers remain willing to pay for the comfort of spacious jets and attentive service.

"Our aim should be to become a long-haul carrier," Grinstein said in one meeting with employees earlier this summer, according to several people who were present. Quizzed by a doubter who said the idea sounded like the last-gasp strategy of now-defunct Pan Am in the 1980s, Grinstein rejoined, "No, that's the future," these people said.

How much of Grinstein's big vision for Delta will survive once the ideas meet reality isn't certain. In a meeting this week, the chief executive will begin to try to win over the board to important elements of his plan.