Delta warns of Salt Lake flight cuts
Carrier says high fuel costs may lead to cost-reduction measures
Delta, the nation's No. 3 carrier, reported Wednesday that it was hampered by high fuel prices in the fourth quarter but was able to post a narrower loss on a solid increase in sales.
During a conference call Wednesday morning, an analyst asked whether more flight cuts were possible and whether Delta's domestic hubs would be affected.
Delta managers confirmed that cutting flights to and from the Salt Lake City and Cincinnati hubs would be a cost-saving measure.
President and chief financial officer Ed Bastian said Delta is targeting 2008 earnings that are flat compared with its 2007 pretax earnings of $625 million. Fuel prices will impact Delta going forward, but the airline believes cuts in domestic capacity and other cost controls will help offset the higher costs, he said.
Domestic capacity cuts would likely impact Delta's hubs in Salt Lake City and Cincinnati, said Glen Hauenstein, Delta's chief of network and revenue management. Delta has 3,400 employees in Salt Lake.
A number of factors shape Delta's decisions to cut flights, and "fuel will play a critical factor in any adjustments that may be made," Delta spokesman Anthony Black said in an interview.
"Flights from a cut standpoint are very likely to be with regional jets as well, similar to what we've done in the past," Black said.
The airline owns Comair and partners with other regional airlines such as SkyWest.
Beginning this month, Delta cut a few dozen regional airline flights. Most of the flights were routes between cities that the airline flew several times a day, although six cities were connected by only one flight a day. For instance, a 50-seat aircraft that ferried people between Salt Lake City and Fayetteville, Ark., was discontinued, Black said.
Bastian said Delta has slowed the process of deciding whether to shed the Comair subsidiary. That's because of Delta's ongoing merger review, Bastian said.
He said Comair will always be an important part Delta "however that contract gets structured."
For the three months ending Dec. 31, Atlanta-based Delta said it lost $70 million, or 18 cents a share, compared to a loss of $1.98 billion for the same period a year earlier. The airline did not provide a per share figure for the prior year, when it was in bankruptcy.
Excluding reorganization items, Delta said it lost $105 million in the fourth quarter. It did not provide a comparable per-share figure.
Recent comments
Amazing, the only flights added in the last two years have been non...
SJ Bobkins | Jan. 25, 2008 at 12:31 a.m.
