danielsexton
Well-Known Member
[ QUOTE ]
Delta to Cut More Jobs in Restructuring
08.18.2004, 08:11 PM
Struggling Delta Air Lines Inc. plans additional job cuts as part of its effort to avoid bankruptcy, chief executive Gerald Grinstein said late Wednesday in a memo to all employees.
"When our plan is successfully implemented, we will be the leaner, simplified, more productive airline we must be in order for us to survive and compete," Grinstein wrote. "Regrettably, one of the consequences will be fewer jobs and additional changes to pay and benefits for all of our employees as we make operational changes to achieve the necessary cost savings."
Grinstein sent the memo after concluding a daylong meeting with Delta's board to unveil his plan.
Atlanta-based Delta has already laid off more than 16,000 employees in the last three years, as it has lost more than $5 billion amid high fuel costs and stiff competition from low-fare carriers. The company and subsidiaries had 70,300 employees as of June 30.
The memo does not say how many more jobs will be cut, and a spokeswoman declined to comment.
Also Wednesday, Delta said it is considering exchanging some of its debt, possibly for equity in the company, as part of its larger effort to avoid bankruptcy.
The company's proposal involves certain equity certificates issued by investor groups that lease aircraft to the airline to assist in financing the planes' cost. It is asking the holders of those certificates to remove any restrictions that would prevent Delta from buying or holding the securities.
The nation's third-largest airline said that if it is successful, it will have more flexibility in restructuring its debt, and therefore a greater likelihood of avoiding a Chapter 11 filing.
One of the options Delta is considering is a debt-for-equity exchange, according to a summary of the proposal provided Wednesday to The Associated Press. The Atlanta-based airline has more than $20 billion in debt.
Another part of Delta's work to avoid bankruptcy will come Thursday, when the company meets with its pilots union in its campaign for deep labor cost savings. Delta is seeking $1 billion in concessions from its pilots, while the pilots have offered up to $705 million in cuts.
In exchange for considering the company's concessions proposal, pilots want a stake in the airline - and a voting seat on its board.
The union has asked that pilots get a stake in the company either through profit sharing or stock options, union spokeswoman Karen Miller said.
In his memo to employees Wednesday night, Grinstein said he presented to the board an employee reward plan that includes a combination of equity, profit-sharing and incentive payouts tied to performance and productivity. He did not give details of the plan.
Meanwhile, Delta's board met earlier Wednesday under enormous secrecy with leaders of the struggling carrier to hear the highly anticipated turnaround plan.
The company's stock soared on speculation about what it would do next. Shares of Delta rose 48 cents, or 13.4 percent, to close at $4.07 Wednesday on the New York Stock Exchange.
Delta officials would not say where the board meeting was held, how long it lasted or offer details of what was discussed.
Delta spokeswoman Meghan Glynn said that "at this point, it's not appropriate to talk." She said the board "will take some time to review" Grinstein's proposals to save the airline.
Among the proposals Grinstein was expected to outline: developing a simpler fare structure or a loyalty program and higher performance standards and better training for employees.
Grinstein told employees last month that Delta plans to seek new markets, domestically and internationally, and new customers either alone or in a partnership. In addition, the airline will look to leverage assets and to deploy them in more profitable ways, he said.
Some analysts believe Delta's turnaround plan could include other drastic changes, including shedding money-losing leisure routes and smaller hubs, like Salt Lake City, and concentrating operations on its large hubs, longer distance business markets and international routes where it may be able to maintain a revenue premium.
Ray Neidl, an analyst with Blaylock & Partners in New York, said he is not surprised by the level of secrecy behind this week's meetings at Delta.
"I think it's going to be big," Neidl said of Grinstein's turnaround plan. "I think he wants to get a final plan to save the airline."
[/ QUOTE ]
I really hope the pilots get a seat on the Board.
Delta to Cut More Jobs in Restructuring
08.18.2004, 08:11 PM
Struggling Delta Air Lines Inc. plans additional job cuts as part of its effort to avoid bankruptcy, chief executive Gerald Grinstein said late Wednesday in a memo to all employees.
"When our plan is successfully implemented, we will be the leaner, simplified, more productive airline we must be in order for us to survive and compete," Grinstein wrote. "Regrettably, one of the consequences will be fewer jobs and additional changes to pay and benefits for all of our employees as we make operational changes to achieve the necessary cost savings."
Grinstein sent the memo after concluding a daylong meeting with Delta's board to unveil his plan.
Atlanta-based Delta has already laid off more than 16,000 employees in the last three years, as it has lost more than $5 billion amid high fuel costs and stiff competition from low-fare carriers. The company and subsidiaries had 70,300 employees as of June 30.
The memo does not say how many more jobs will be cut, and a spokeswoman declined to comment.
Also Wednesday, Delta said it is considering exchanging some of its debt, possibly for equity in the company, as part of its larger effort to avoid bankruptcy.
The company's proposal involves certain equity certificates issued by investor groups that lease aircraft to the airline to assist in financing the planes' cost. It is asking the holders of those certificates to remove any restrictions that would prevent Delta from buying or holding the securities.
The nation's third-largest airline said that if it is successful, it will have more flexibility in restructuring its debt, and therefore a greater likelihood of avoiding a Chapter 11 filing.
One of the options Delta is considering is a debt-for-equity exchange, according to a summary of the proposal provided Wednesday to The Associated Press. The Atlanta-based airline has more than $20 billion in debt.
Another part of Delta's work to avoid bankruptcy will come Thursday, when the company meets with its pilots union in its campaign for deep labor cost savings. Delta is seeking $1 billion in concessions from its pilots, while the pilots have offered up to $705 million in cuts.
In exchange for considering the company's concessions proposal, pilots want a stake in the airline - and a voting seat on its board.
The union has asked that pilots get a stake in the company either through profit sharing or stock options, union spokeswoman Karen Miller said.
In his memo to employees Wednesday night, Grinstein said he presented to the board an employee reward plan that includes a combination of equity, profit-sharing and incentive payouts tied to performance and productivity. He did not give details of the plan.
Meanwhile, Delta's board met earlier Wednesday under enormous secrecy with leaders of the struggling carrier to hear the highly anticipated turnaround plan.
The company's stock soared on speculation about what it would do next. Shares of Delta rose 48 cents, or 13.4 percent, to close at $4.07 Wednesday on the New York Stock Exchange.
Delta officials would not say where the board meeting was held, how long it lasted or offer details of what was discussed.
Delta spokeswoman Meghan Glynn said that "at this point, it's not appropriate to talk." She said the board "will take some time to review" Grinstein's proposals to save the airline.
Among the proposals Grinstein was expected to outline: developing a simpler fare structure or a loyalty program and higher performance standards and better training for employees.
Grinstein told employees last month that Delta plans to seek new markets, domestically and internationally, and new customers either alone or in a partnership. In addition, the airline will look to leverage assets and to deploy them in more profitable ways, he said.
Some analysts believe Delta's turnaround plan could include other drastic changes, including shedding money-losing leisure routes and smaller hubs, like Salt Lake City, and concentrating operations on its large hubs, longer distance business markets and international routes where it may be able to maintain a revenue premium.
Ray Neidl, an analyst with Blaylock & Partners in New York, said he is not surprised by the level of secrecy behind this week's meetings at Delta.
"I think it's going to be big," Neidl said of Grinstein's turnaround plan. "I think he wants to get a final plan to save the airline."
[/ QUOTE ]
I really hope the pilots get a seat on the Board.
