Major airlines will cut flights further in 2009

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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.

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.

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

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

In a memo to employees, Delta CEO Richard Anderson and President Ed Bastian said, "We will offer voluntary programs to adjust staffing needs."

Earlier this year, Delta sharply cut U.S. capacity and 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 percent reduction in U.S. flying by American, said Beverly Goulet, the treasurer of parent AMR Corp.

Mr. Kelly said Southwest would drop unprofitable routes and trim first-quarter capacity 4 percent to 5 percent.

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."


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