Greetings,

Delta Braces Workforce For Tough 2009

Thu, 11 Dec '08

But Execs Think Carrier Will Still Make Money

Delta Air Lines is preparing its workforce for a challenging 2009. In a memo to employees, CEO Richard Anderson warned last week, "Consumers and businesses during a recession tend to tighten their belts, and tighten their belts means they won’t buy as many airline tickets."

A copy of the message was obtained by the Atlanta Journal-Constitution, which reports the airline expects a drop in revenue of 8 to 12 percent in 2009. Delta President Ed Bastian calls it, "...an unprecedented level of decline in the amount of airline industry revenue, but it’s also related to what we’re seeing going on across other economic sectors."

Making matters worse, Delta has one of its hubs in Detroit, where the domestic automakers are struggling now, and where the local economy -- already on the precipice -- would likely teeter hopelessly over the edge if the car companies were to close.

If Delta's forecast holds true, the airlines will see a slump second only to the period immediately following 9/11, when the industry saw 17 percent of its revenue evaporate.

Bastian did have a bit of good news. Throughout the challenges in 2009, he expects Delta to turn a profit due to the remarkable drop in fuel prices.