Delta Latest To Cut Flights Because Of War

A steady stream of airline schedule cuts continued today when Delta Air Lines announced a 12 percent networkwide capacity reduction "in response to declining passenger demand due to military action in Iraq."

Delta's cuts will include decreased domestic flight frequencies in certain markets, effective March 27, and transatlantic flight suspensions to certain destinations, effective April 6. The carrier also said it has delayed indefinitely the start of some seasonal flights to Europe.

"Chipping away supply doesn't save the industry," said UBS Warburg analyst Sam Buttrick, speaking this morning at BTN's Corporate Travel World conference in New York. "Overall, the industry needs to remove 18 percent to 20 percent of capacity to get fixed."

Buttrick noted that a United Airlines liquidation would "fit the bill," but handicapped the odds of that occurring as no better than 25 percent.

Last week, American Airlines announced a 6 percent cut in international capacity, on top of a previously announced 7 percent reduction in the domestic market. Bankrupt United is taking out another 8 percent of its systemwide capacity. Northwest Airlines said it will bring down capacity by 12 percent, impacting flights in North America and to Asia/Pacific and Europe.