Delta Grounds Planes Amid Slowing Economy

Friday, June 29, 2001

ATLANTA — Delta Air Lines, the nation's third-largest airline, said on Friday it will cut capacity by 1.4 percent by removing 10 aircraft from scheduled service in response to steep fuel prices, a slowing U.S. economy and the high cost of maintaining older planes.

The Atlanta-based company said six aircraft will be dropped from the schedule on Sept. 1, followed by another two aircraft on Nov. 1 and two on Dec. 1.

Delta said the removal of the aircraft will result in a consolidated system capacity growth of 0.3 percent for calendar year 2001 compared with 2000.

Seven Boeing 727 aircraft will be permanently retired, the company said, as it accelerates a phasing out of the 72 Boeing 727s in its fleet, which it expects to complete by mid-2005.

``Capacity will be reduced on routes particularly impacted by the current economic environment, but where Delta has an appropriate level of service to retain our traffic and recapture revenue,'' said Frederick Reid, Delta's president and chief operating officer.

He said in a statement high fuel prices, the slowing economy and the higher costs of maintaining older aircraft led to the company's decision to remove the aircraft from service.

The U.S. airline industry is grappling with the sharpest revenue decline in two decades as a slowing U.S. economy curtails lucrative corporate travel.

Last week, several U.S. carriers warned they would post wider-than-expected second-quarter losses as Wall Street analysts downgraded forecasts for the industry's yearly performance.

With the weakening of business travel, U.S. carriers have begun courting leisure travelers to offset losses through discounted fares as the U.S. summer season picks up.

http://www.foxnews.com/story/0,2933,28464,00.html

-- Martin Thompson (mthom1927@aol.com), June 29, 2001