Delta Air Lines dal, which has pinned its hopes for success on international expansion, said Tuesday the recession will force it to cut trans-Atlantic flying capacity up to 13% and trans-Pacific flying up to 14% late this year.
Tuesday's announcement — which lacked specifics — comes six months after Delta acquired Northwest Airlines to become the world's biggest carrier with the industry's largest global network.
Last fall, Delta announced 15 new international routes for this summer to Europe, Africa and Asia, including new non-stop flights between New York John F. Kennedy Airport and Tokyo Narita and between Atlanta and Johannesburg, South Africa. The newly announced cuts, slated to begin in September, come on top of Delta's previous plan to reduce overall capacity this year by 6% to 8%.
"The worsening global economy continues to place additional pressure on the airline industry," said Delta CEO Richard Anderson and President Ed Bastian in a statement. "Revenues have weakened, particularly in international markets."
The news release preceded a conference sponsored by JPMorgan Chase featuring presentations from big carriers including American amr, United uaua and Continental airlines cal, all of which have large international networks.
Atlanta-based Delta was the only carrier Tuesday to announce specific additional cuts in flying.
Senior executives at Southwest luv, Continental and AMR, the parent of American Airlines, all said they are prepared to make cuts if passenger demand deteriorates more. Southwest CEO Gary Kelly said demand in the first week of March was off 7% from a year ago.
"If we need to take out more capacity, we'll do it," said Tom Horton, American's executive vice president of finance.
Tuesday, Delta said the economy could jeopardize its order for 18 new Boeing 787 Dreamliners. The widebody Dreamliner, whose production is months behind schedule, will be the first passenger jet with a fuselage made of man-made composite material, not metal. The 787 is scheduled to make its first flight in June, with a first delivery to an airline a year from now — two years later than originally planned.
Still, airlines are anxious to get the new widebody that will seat 210 to 250 passengers, because its lighter weight and other technological advancements will make it 15% to 20% more fuel-efficient than the planes it will replace.
Delta hasn't canceled any orders, but Bastian said at the conference that Delta still doesn't have a reliable delivery schedule and is talking to Boeing about how its orders "fit into our longer-term fleet strategy."
Wall Street analyst David Strauss of UBS Investment Research said in a report Tuesday that so many passenger jets have been taken out of service because of falling travel demand that jet builders Boeing and Airbus may have to cut production.
Yet airline stocks soared Tuesday along with the rest of market. The Amex airline index rose 8.4%.
Shares of the parent companies of AirTran aai, American, Continental, Delta, United and US Airways lcc all posted double-digit increases, with Continental leading the way, up 19.6% gain to $7.70 a share.