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Delta Employees CU Not Planning to Change Relationship with Troubled Delta Air Lines, 7,000 Job Cuts to Come

ATLANTA - In a race to avoid having to file for bankruptcy, Delta Air Lines announced on Sept. 8 that it will cut up to 7,000 jobs over the next 18 months. A Delta Employees Credit Union (DECU) spokesperson offered no comment on the airline's financial troubles. A "safety and...

By Staff Writer | Updated on September 14, 2004

ATLANTA – In a race to avoid having to file for bankruptcy, Delta Air Lines announced on Sept. 8 that it will cut up to 7,000 jobs over the next 18 months. A Delta Employees Credit Union (DECU) spokesperson offered no comment on the airline’s financial troubles. A “safety and soundness” section on the credit union’s Web site reassures members that it “has no plans” to change its relationship with Delta should the carrier file for bankruptcy. DECU also said “based on what has occurred in other bankruptcy cases, Delta’s policy of sending direct payroll deposits to DECU should be unaffected by a Chapter 11 filing,” members will still have access to their accounts and funds and consumer loan payments will still be due. The credit union serves nearly 179,000 members and has $2.5 billion in assets. Meanwhile, Delta Air Lines CEO Gerald Grinstein said the 7,000 job cuts account for 10% of the company’s employee base. The carrier also plans to reduce its administrative overhead costs by 15% including management cuts; announce a reduction in wages by the end of the month and expect employees to pay more for their health insurance. Grinstein said the airline will no longer use the Dallas-Fort Worth Airport as one of its four hubs but will expand its hubs in Cincinnati and Salt Lake City with redeployed aircraft from Dallas-Fort Worth. “We’re working hard and fast to avoid (bankruptcy),”Grinstein told the Associated Press. “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.” Grinstein said the airline is looking for more than $5 billion in annual cash savings by 2006. The planned reductions for the nation’s third-largest carrier would come on top of 16,000 job cuts seen in the last three years.

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