Exec: Delta to be 'smaller company'

Delta Air Lines is cutting its trans-Atlantic flight capacity by 10 percent to 12 percent after Labor Day, saying it needs to adjust to higher fuel costs and declines in demand.

The reduction is part of a collection of moves Delta is taking to cut back. Delta previously announced that it will reduce flight capacity across its worldwide system by 4 percent after Labor Day compared with the same period of last year, and had acknowledged that one of the weakest areas is trans-Atlantic flights.

Delta also earlier this month announced it will offer buyouts and early retirements to cut its workforce, though it gave no target figure.

"We will be a smaller company," Delta president Ed Bastian said Thursday during a presentation at a Merrill Lynch conference in Boston. He said Delta will be 5 percent smaller than previously planned by the end of this year.

Bastian said fuel costs, reduced demand to Europe, turmoil in the Middle East and the disasters in Japan have all hurt air travel. After posting a $593 million profit for 2010, Delta fell into the red in the first quarter, with a $318 million loss.

"Sitting and hoping that high fuel prices are going to go away or that fuel prices will fall is not a strategy," Bastian said. Because revenues have not kept pace, "we are going to be reducing our footprint."

Delta plans to make the trans-Atlantic flight cuts by canceling routes, reducing flight frequencies and using smaller jets, though it hasn't named any cities to be cut.

It is making the cuts in conjunction with partners Air France-KLM and Alitalia. Combined, the airlines will cut capacity on flights between Europe and the United States and Canada by as much as 7 percent to 9 percent this fall, compared with the year-ago period. The carriers' antitrust immunity enables them to make such moves jointly.