ATLANTA – The chief executive of Delta Air Lines gave a bleak outlook Wednesday of the carrier’s ability to increase revenue, and said that means getting deep wage cuts from pilots is even more crucial to its survival.
In a speech at an investor conference in New York, CEO Gerald Grinstein said low-fare rival AirTran Airways has for the most part been able to call the shots on ticket prices in many of the markets in which the two compete.
“We have no pricing power and yields are continuing to erode,” Grinstein said. He added, “We have to learn to live in the revenue environment that we’re in.”
That makes getting wage cuts from its pilots “a crucial first step” in Delta’s turnaround plan, he said. He reiterated that the Atlanta-based company would consider bankruptcy only as a last resort.
“A la Mark Twain, the reports of our death are premature,” Grinstein said.
Some analysts believe Delta, the nation’s third-largest airline after American and United, has only six to nine more months to get the wage cuts or face bankruptcy. The airline has lost more than $3 billion and laid off 16,000 employees in the last three years.
“If they don’t have a deal by the first quarter of next year, then it’s going to be all over,” said Ray Neidl, an analyst with Blaylock &Partners in New York.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
