The economic downturn may be providing a break from high gasoline prices, but consumers are not benefiting in another transportation area -- air travel.
After being buffeted by sky-high fuel prices earlier this year, airlines are now struggling to fill passenger cabins because of a declining economy. As a result, Delta Airlines is making dramatic cuts in service.
Delta President Ed Bastian outlined the reductions in capacity in a memo to Delta employees Tuesday.
"System-wide 2009 capacity will be down six to eight percent year over year, Bastian said. "Domestic capacity will be down eight to ten percent and international capacity will be down approximately three to five percent. These numbers include the full impact of previously announced 2008 capacity reductions."
Speaking later at a conference in New York, Bastian noted that Delta is already cutting domestic flights by 12 percent this year. That means, over a two year period Delta will have reduced its domestic capacity by 20 percent.
Even with the economic recession, Bastian said Delta is achieving significant benefits from its recent merger with Northwest Airlines. Among those benefits is Northwest's large number of international routes, which are more profitable for airlines than domestic flights. Bastian says Delta must "take the necessary steps" to adjust to shifting demand in a harsh business climate.
"These economic hurdles are difficult, and we remain committed to building our company on a durable financial foundation with industry-leading liquidity," Bastian said.