Delta Air Lines Inc. (NYSE:DAL)
told employees Tuesday it intends to cut more jobs and reduce 10% of its international capacity as the world's largest airline attempts to navigate a global slowdown while continuing integration work on last year's $2.6 billion purchase of Northwest Airlines Corp.
Atlanta-based Delta's blaming the economy for the cuts, and to be sure the airline almost certainly would not be trimming its flying as much in a boom economy. But the cuts also could be a sign that the airline's well-regarded plan to emphasize international flying, where there is less discounter competition than on domestic routes, has not been the panacea that the company had hoped.
The recession also provides good cover for Delta to take post-merger integration steps that seem logical -- though controversial -- in any economy, most notably the politically difficult process of streamlining domestic hubs.
A USA Today piece notes that while the merged company is growing flying out of its New York hub, capacity at Atlanta, Detroit, Minneapolis and Memphis will all shrink. And the airline's Cincinnati hub, long mentioned by outsiders as a potential target of cuts given the addition of Northwest's nearby strong Midwest operations, will see flying fall by 25%.
The bottom line for Delta remains strong: The airline said it expects to be profitable in 2009. In a world recession, traffic is naturally going to fall, so the cuts are to be expected. But inevitably some of those routes will not return, even when boom times come again. -
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