NEW YORK, Sept 8 (AFP) - Delta Air Lines said Wednesday it would cut 6,000 to 7,000 jobs and slash five billion dollars in operating costs in a massive restructuring aimed at keeping the carrier out of bankruptcy.
Chief executive Gerald Grinstein, in remarks to employees, described the overhaul as a "comprehensive, 360-degree plan that reinvents Delta."
Delta said it was targeting more than five billion dollars in annual cash savings by 2006, and was on track to deliver nearly half of that total by the end of this year.
Despite the massive reorganization, Delta said it still may face bankruptcy "as a result of the rapid deterioration of its financial condition due to low yields, high fuel prices, its uncompetitive labor costs, and its high debt burden," and the possible disruption from anticipated pilot early retirements.
"Bankruptcy is a real possibility," the statement said.
"We're working hard and fast to avoid it," Grinstein said, "but if the pilot early retirement issue is not resolved before the end of the month, or if all of the pieces don't come together in the near term, we will have to restructure through the courts."
The plan calls for over 51 percent of the company's network to be restructured by January 31, 2005, resulting in "the largest single-day schedule transformation in Delta's history."
Delta's statement said the plan would create "a simpler, more efficient airline" aimed at competing with low-cost carriers in the airline industry's worst slump.
Delta's network would be reorganized around its hub in Atlanta, Georgia, while Dallas-Fort Worth would be removed as a hub.
The carrier would increase hub operations in Atlanta, Cincinnati and Salt Lake City, and increase flights from its low-cost subsidiary called Song.
Some 6,000-7,000 jobs would be cut over the next 18 months, under the plan, which also calls for lowering management overhead costs by 15 percent, and reducing pay and benefits.
Some of those cuts would be offset by an "employee reward program" to include equity, profit sharing and performance-based incentive payouts.