Delta puts hiring freeze on Salt Lake

ATLANTA — A Delta Air Lines Inc. executive said Tuesday that the nation's No. 3 carrier is freezing hiring in certain areas, as part of a cost-cutting move aimed at dealing with high fuel prices that will weaken the company's fourth-quarter results.

The hiring freeze applies to the airline's Salt Lake City operations, Delta spokesman Anthony Black said. There are no plans for layoffs for any of the 3,400 existing employees in Salt Lake.

The airline also intends to reduce some flights, although specific details were not available Tuesday. Black said routes would probably not be eliminated.

President and chief financial officer Ed Bastian said at the Calyon Securities U.S. Airline Conference in New York that high fuel costs will "dampen" Delta's operating margin — the ratio of operating income to sales revenue, expressed as a percentage — in the quarter ending Dec. 31.

He said Delta's current projection for operating margin is flat to minus 2 percent. Previously, the company projected an operating margin of 3 percent to 5 percent for the quarter. For all of 2007, Bastian said, Delta is still projecting an operating margin of around 6 percent.

The company did not provide any updated profit, sales or earnings-per-share projections for the fourth quarter.

Cost cuts will be key to helping Delta deal with higher fuel prices, Bastian said, noting that jet-fuel prices are up nearly 50 percent since the beginning of 2007. He suggested there could be job cuts, but he didn't offer any numbers or specifics.

Delta shares fell 5.2 percent Tuesday after Bastian's comments. Shares of several other major carriers also fell after they outlined plans Tuesday to slow their growth and cut costs to deal with higher fuel prices and the prospect of an economic slowdown that could hurt air travel.

"We are concerned about growing evidence of slowing economic growth that would inevitably affect passenger demand, coupled with a surge in energy prices," said Southwest Airlines Co. chief executive Gary C. Kelly.

Kelly's comments came as Southwest announced its capacity would grow 4 percent to 5 percent next year. It had initially forecast growth of 8 percent and later scaled back to 6 percent.

Executives for some carriers also said they are actively planning for airline mergers, although they were careful not to discuss specific combinations.