20-May-2011 12:34 PM

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

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.

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