Delta To Further Cut Capacity

Delta Air Lines CEO Richard Anderson and president Edward Bastian in a memo released today said the carrier, combined with its recently acquired Northwest Airlines subsidiary, would further reduce systemwide capacity by up to 8 percent in 2009. Delta said the action "comes as a result of the global economic recession and weaker demand for air travel."

Delta said domestic capacity next year would be down by between 8 percent and 10 percent, while international capacity will be pulled down by 3 percent to 5 percent.

Bastian today during the Credit Suisse Global Airline Conference told investors that it was at this time last year that Delta began to scale back capacity for 2008—a trend that accelerated throughout the year for Delta and the domestic industry at large.

Bastian said the carrier's fourth-quarter domestic capacity this year is down a full 12 percent compared with the same period last year and a full 20 percent compared with the last three months of 2007. "You've never seen that level of domestic supply discipline, not just at Delta but across the industry," Bastian said today.

Though Bastian said Northwest's network combined with Delta's offers "pockets of growth" internationally, next year's international capacity still would net a decline amid network rationalization.

United Airlines senior vice president and CFO Kathryn Mikells during the Credit Suisse conference today did not announce a further scaling back of capacity for 2009, but echoing the sentiment of other carriers, said, "We are clearly willing to do whatever it takes to get back to profitability. At this time, we're very comfortable with the capacity cuts that have taken place."