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Delta’s Cutbacks

Delta announced that it will sell up to 5 Boeing 777 jets, and another 3 scheduled for delivery in 2006 will either be sold or converted into other jet orders. The move should save the airline $300 million in capital expenditures. Delta’s in worse shape than most people thought 12 months ago. However, cancelling or converting aircraft orders is not a sign of the apocalypse; Continental recently cancelled its orders for a few Boeing 757s (forcing Boeing to discontinue the aircraft), and that carrier is in (relatively) good shape. This is just the first (or second, if you count the announcement about Song cutting back service) of many moves Delta will need to make to get their house in order and signal to its unions that it is serious about making sacrifices.

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