AOL Money & Finance

Northwest Air posts

Feed

Delta to cut capacity by up to 8% in 2009, plans 'voluntary' job cuts

Posted Dec 2nd 2008 3:05PM by Joseph Lazzaro (RSS feed)
Filed under: Delta Air Lines (DAL)

Delta may still be ready when you are, but in 2009 they're not going to be as big.

Citing the global recession, Delta (NYSE: DAL) announced that it will cut an additional 6-8% of capacity in 2009. The move will result in an up to 10% reduction in domestic capacity, when one includes the impact of previously-announced operational cuts. Delta also said it will eliminate an undetermined number of jobs.

Shares of Delta (NYSE: DAL) rose 52 cents to $8.48 on Tuesday at mid-day amid a broader market rally.

Delta, which recently merged with Northwest to become the world's largest airline, said it will offer "voluntary programs" to decrease the size of its workforce. Delta President Ed Bastian called the cuts "dramatic" and said total seat capacity, domestic and international, over the two-year, 2008-2009 period, will be reduced by 20% -- a required step, due to the downturn in both business and leisure travel, The Wall Street Journal reported.

Continue reading Delta to cut capacity by up to 8% in 2009, plans 'voluntary' job cuts

Airline mergers seen preparing U.S. carriers for new global travel era

Posted Feb 20th 2008 5:26PM by Joseph Lazzaro (RSS feed)
Filed under: Consumer experience, AMR Corp (AMR), Contl Airlines'B' (CAL), UAL Corp (UAUA), Delta Air Lines (DAL)

Is the U.S. airline sector on the eve of another transformation? One analyst thinks it may be, if recent merger rumblings are any indication.

The Delta Air Lines (NYSE: DAL) / Northwest Airline (NYSE: NWA) merger discussions and chatter that Germany's Lufthansa is considering an investment in a potential merger between United (NASDAQ: UAUA) and Continental (NYSE: CAL) suggest to independent equities analyst C. Leonard Bauer that a new commercial aviation paradigm may be up ahead.

"When you look back at the last 30 years, you can say that the 1980s, clearly, was the decade when mergers were needed to meet the demands of the new market, basically the mass consumer market in the U.S.," Bauer told BloggingStocks Wednesday. "Those larger carriers' lowered seat prices led to a huge increase in domestic travel, which helped bring flight travel to the typical citizen."

Continue reading Airline mergers seen preparing U.S. carriers for new global travel era

Global competition, 2008 election may intensify airline merger talk

Posted Jan 11th 2008 4:12PM by Joseph Lazzaro (RSS feed)
Filed under: AMR Corp (AMR), Contl Airlines'B' (CAL), UAL Corp (UAUA), Delta Air Lines (DAL)

Delta Air Lines Delta Air Lines (NYSE: DAL) is said to be seriously considering a merger with either Northwest Airlines or United Airline's parent UAL Corp, people close to the matter say, The Wall Street Journal reported Friday.

According to the Journal, Delta is expected to give CEO Richard Anderson permission to pursue formal mergers talks with both Northwest and United, a source with knowledge of the matter said.

Delta shares were down 7 cents to $15.91, while Northwest (NYSE: NWS) declined 22 cents to $15.63, and United (NYSE: UAUA) fell 59 cents to $31.60 amid a broad market sell-off Friday afternoon.

Too many carriers

Many sector analysts believe the U.S. market has too many carriers, and could benefit from two or even three mergers or takeovers. American Airlines (NYSE: AMR) is the largest carrier by traffic, followed by United, Delta, Continental (NYSE: CAL) and Northwest.

Continue reading Global competition, 2008 election may intensify airline merger talk

A slowdown at Southwest

Posted Jun 14th 2007 8:20AM by Douglas McIntyre (RSS feed)
Filed under: Bad news, Competitive strategy, Southwest Airlines (LUV)

Southwest Airlines (NYSE: LUV) went from being a tiny regional airline to a major low-cost carrier under former CEO Herb Kelleher. He must not be very happy these days.

Southwest announced that its growth was slowing (subscription required) and that revenue for the next quarter would be disappointing. Other airlines including Northwest (NYSE:NWA) are saying that they will have to cut capacity.

According to The Wall Street Journal, airlines are able to sell seats, but must offer large discounts because passengers have less discretionary spending due to economic problems including the slowdown in housing. And Southwest's jet fuel prices rose 47% last year as oil and gas prices moved up.

Southwest used to be able to handle cost problems better than most airlines because it only had to maintain a fleet of one type of plane, the 737, and its workers were the most productive in the industry. Low prices drew customers from large rivals especially American. The airline's share price had a huge run from 1980 to 2001, up from $.16 to over $20. But, the competition caught on and began to offer better fares on many routes and cut labor costs.

The price of success.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Symbol Lookup
IndexesChangePrice
DJIA+30.6910,464.40
NASDAQ+6.872,176.05
S&P 500+4.981,110.63

Last updated: November 25, 2009: 04:23 PM

BloggingStocks Exclusives

Hot Stocks

DailyFinance Headlines

Latest from BloggingBuyouts

WalletPop Headlines

AOL Business News

BioHealth Investor Headlines

Sponsored Links

Most Commented On (14 days)

My Portfolios

Track your stocks here!

Find out why more people track their portfolios on AOL Money & Finance then anywhere else.

  • My Portfolio
  • Create a New Portfolio

BloggingStocks Partners

More from AOL Money & Finance