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Japan traffic dip and higher fuel prices slows Delta's debt reduction efforts

20-May-2011 12:34 PM

Delta Air Lines President Ed Bastian stated high fuel prices and the reduction in travel to Japan means the carrier is paying down debt a little slower than it had anticipated (Bizjournals, 19-May-2011). It expects to lower debt to USD10 billion in early-2013, instead of late-2012. Delta also plans to remove 140 aircraft from service and reduce its overall capacity by 4%. The following is a breakdown of service changes by region:

  • Domestic cuts of up to 3%, which includes a 25% reduction of Memphis hub departures;
  • Atlantic cuts of up to 12% (and joint venture partners cuts of up to 9%);
  • Latin America increases of up to 4%, including more services to Mexico and South America;
  • Pacific reductions of up to 3%, including reductions of Haneda Airport service.

Mr Bastian also stated a “headcount reduction plan” is underway, noting a voluntary exit programme with 55,000 employees eligible.