Airlines planning more cutbacks in flights in '09

DALLAS — Executives of major U.S. airlines, already seeing signs of slumping travel demand, said Tuesday they were ready to cut more flights, and Delta hinted at more job losses as the carriers jockey to survive the deepening recession.

U.S. airlines have been helped by a sudden drop in jet fuel prices, and they already cut capacity this fall to further reduce costs and drive up fares.

But traffic has fallen even faster than the supply of seats, especially since the stock market went into a nosedive.

"October was a bang-up month, almost unexplainably strong," said Southwest Airlines Co. Chairman and Chief Executive Gary Kelly. "The trends changed in November."

Delta Air Lines Inc., the world's largest carrier, said it will reduce overall capacity another 6 to 8 percent next year. Delta and its Northwest Airlines unit will cut U.S. capacity 8 to 10 percent.

In a memo to employees, Delta CEO Richard Anderson and President Ed Bastian said they are analyzing the impact of reduced flying on jobs, and "as in the past, we will offer voluntary programs to adjust staffing needs." They did not elaborate.

Earlier this year, Delta sharply cut U.S. capacity and aimed to cut 2,000 jobs, although more than 4,000 workers took voluntary severance. Delta and Northwest have 75,000 employees.

American Airlines and its feeder carrier, American Eagle, plan to cut capacity 6 percent next year, with an 8.5 reduction in U.S. flying by American itself, said Beverly Goulet, treasurer of parent AMR Corp.

Even Southwest, which saw the pullback of other airlines as an opportunity for growth, is cutting capacity. Kelly said Southwest would drop unprofitable routes and trim first-quarter capacity 4 percent to 5 percent, although that's slightly less than the airline's previous goal of a 5 percent to 6 percent reduction.

Analysts have already factored in some further cuts in capacity. But Ray Neidl, an analyst for Calyon Securities, said "demand seems to be falling a little more than expected."

The economic slowdown has hurt demand for the airlines' most lucrative seats.

United said it would reconfigure its international planes to cut the number of premium seats by 20 percent while adding seats in coach. Continental Airlines Inc. said it too was seeing weaker demand for first- and business-class seats on international flights, which had been a relatively strong part of the business.