Thursday July 12, 1:32 pm Eastern Time
Delta Air Lines Implements Hiring Freeze
ATLANTA (Reuters) - Delta Air Lines Inc. (NYSE AL - news), underscoring the financial hurdles facing many U.S. airlines as a softening U.S. economy has cut into corporate travel, has stopped hiring pilots and flight attendants.
The hiring freeze was implemented about a month ago, spokesman Russ Williams said on Thursday. "This is a reflection of the current economic conditions. We've seen a softening in bookings relative to the economy,'' he said.
The hiring freeze, expected to continue indefinitely, applies to all positions companywide except those essential to the carrier's operation, Williams said. Delta has 74,000 employees worldwide, with more than 30,000 based in the Atlanta metropolitan area.
The hiring freeze comes as Delta, the No. 3 U.S. airline, prepares to report an estimated second-quarter net loss of $140 million to $160 million next week.
The slowing U.S. economy and resulting falloff in business travel have put the squeeze on many airlines, which are seeing sharp revenue declines. In addition, high fuel prices and soaring labor costs are also leading some airlines to cut back.
UAL Corp.'s (NYSE:UAL - news) United Airlines, the No. 2 U.S. carrier, has stopped hiring pilots, said spokeswoman Whitney Staley. The freeze also includes noncritical positions related to management, she said.
Chicago-based UAL, which is expected to report a second-quarter loss, earlier this month cut its quarterly dividend by 84 percent, citing economic weakness.
No. 4 carrier Northwest Airlines Corp. (NasdaqNM:NWAC - news), which has also warned of a second-quarter loss, recently said workforce reductions are inevitable as it cuts back in the face of weaker demand.
Delta is coping with a number of financial challenges. It was hard hit by a prolonged pilots strike at its Comair regional-airline unit settled last month. In past weeks, Delta has cut airfares to better compete with smaller rivals such as AirTran Holdings Inc. (AMEX:AAI - news) and disclosed plans to cut capacity.
