Is S.L. still in Delta's future?

By Brady Snyder
Deseret Morning News
Published: Thursday, Sept. 2, 2004 5:50 p.m. MDT
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A representative of Delta Air Lines hinted Wednesday his company will not be abandoning Salt Lake City as part of the airline's closely guarded restructuring plan.

Sargon Younan, Delta's Rocky Mountain regional district sales manager, told the Utah Air Travel Commission that Salt Lake City will "definitely" remain "in the picture" for Delta Air Lines after restructuring measures take effect.

While Younan didn't say whether Salt Lake City would keep its hub status, he did hint that Delta would not be abandoning Utah — as some industry analysts have suggested.

"We are committed to this community, and the Salt Lake hub is important to us," he said. "We're looking to become more profitable, and definitely Utah is in that picture."

Younan said specific details of Delta's restructuring plan will be released in the next two weeks.

For more than a month now, industry analysts and trade publications have speculated that Delta may have to scrap money-losing leisure routes and smaller hubs like Salt Lake City and Dallas-Fort Worth.

In a research note last month, Ray Neidl, an industry analyst with Blaylock & Partners in New York City, noted several possible restructuring ideas the airline may be considering.

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Among those ideas, he said, was "possibly abandoning money-losing leisure routes and smaller hubs (i.e. DFW and Salt Lake City)."

Other ideas were:

  • Cutting $1 billion in annual pilot costs and cutting a total of $2.3 billion in annual costs company-wide.

  • Concentrating operations on large hubs, longer-distance business markets and international routes that may be more profitable.

  • Possibly terminating Song, Delta's discount carrier arm.

While Younan's comments indicate Delta won't abandon Salt Lake City like Neidl suggests, the comments didn't ease many of the worries at the Salt Lake City Department of Airports. Airport officials continue to decline to comment on Delta's restructuring and how it might affect Salt Lake City International.

"I understand where Sargon's coming from, but we're just going to keep our line" of not commenting on the situation, department spokeswoman Barbara Gann said.

Air travel commission member Keith Christensen said he is being careful not to read too much into Younan's statement. "Yeah, he said Salt Lake is definitely in the financial mix" after the restructuring, but "I don't think you can read much more or less into that comment."

"We're watching it very closely," Christensen added. "We're a better location for Delta than Dallas, and hopefully that's the way it will shake out."

Last month, Delta CEO Gerald Grinstein met with the company's board to lay out his plans for changing the airline.

Delta also is seeking $1 billion in concessions from its pilots and has warned that it may have to file for bankruptcy if it doesn't get those cuts. Airline officials have met with representatives of the pilots union, but again, no details of any proposals or discussions have been released.

E-mail: bsnyder@desnews.com

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