ATLANTA - Delta Air Lines' third-largest hub at Salt Lake City International Airport will be spared from closure and will gain 58 daily flights, including one to Mexico, under a far-reaching restructuring plan detailed Wednesday by Chief Executive Gerald Grinstein.
The struggling airline's hubs in Atlanta and Cincinnati also will stay open, but the Dallas-Fort Worth hub will close and its flights will move to Salt Lake City and other hubs by Jan. 31, 2005.
Grinstein called the scheduling changes to occur on that day ''the largest single day schedule transformation in Delta's history - the big bang.''
''It's very positive news for the airport and for Utah," said Tim Campbell, director of Salt Lake City International.
Delta's decision to maintain its Salt Lake City hub reflects the city's geographic advantages and the fact that the Salt Lake airport offers "some of the lowest operational costs in the country," he added.
Grinstein also announced plans to eliminate 6,000 to 7,000 positions nationwide during the next 18 months and to cut wages and benefits, but the effect of the job cutbacks on Delta's 4,500 Utah employees is unclear, he said in an interview.
"One of the things we don't know is what effect de-hubbing Dallas-Fort Worth will have on Salt Lake City. D-FW and Salt Lake City compete on transcontinental business."
Last month, analysts following Delta's declining fortunes speculated its Salt Lake City hub would be closed, along with Dallas-Fort Worth, because neither seems able to turn a profit, but Grinstein said Salt Lake City is strategically important to Delta.
"Salt Lake City has a good base of traffic," he said. "While it is not now profitable, we have done enough of an evaluation to know if we get our costs down, we should be able to make a living there."
The Salt Lake City hub will need further "tuning and adjustments to make it work."
"Salt Lake City is slightly too far west," Grinstein said. "Denver is the preferred place. But it [Salt Lake City] does provide significant access to the West Coast."
The airline hopes the additional flights, which include daily excursions to Cabo San Lucas, Mexico, and Maui, Hawaii, will help boost the Salt Lake hub's profitability.
St. George-based SkyWest Airlines, which operates as Delta Connection under a contractual agreement with Delta, also will benefit from Wednesday's announcement, said Steven Hart, vice president of marketing development.
The regional airline will pick up 14 of 37 new daily Delta Connection flights Delta plans for Salt Lake City in addition to the 58 Delta flights.
Seven Dallas-based Delta Connection aircraft also will return to Utah.
"It will help us consolidate our operation in Salt Lake City," Hart said.
Grinstein said SkyWest probably will not see demands for give-backs or restructuring of its contract with Delta. "We just renegotiated our contract with SkyWest and I don't see our being able to renegotiate it," he said.
He emphasized that most of the new Delta flights in Salt Lake City will be aboard mainline Delta aircraft. He said he is wary of turning long-distance routes (more than two hours in length) over to regional
jets, which are uncomfortable for passengers. "Since they are under the Delta brand, it degrades our brand in doing that."
Grinstein also reiterated that pilots' pay remains crucial to any effort by Delta to avert bankruptcy after having lost more than $5 billion in the past three years.
The company is asking for $1 billion in wage cuts from the pilots, who so far have offered $705 million. Delta also made a pension offer to the pilots that Grinstein hopes will encourage retirement-age pilots to stay with the company rather than leaving to take advantage of early retirement benefits.
If the approximately 2,000 experienced pilots who are eligible for early retirement take it, it could ground many large Delta aircraft. "If we have significant pilot retirements, we will have to ground part of our fleet," Grinstein said. "Then time has run out."
Delta pilots spokesman Chris Renkel in a statement Wednesday said the pilots group already has initiated talks with Delta management to "preserve operational integrity" in the face of early retirements.
"We have been successful in ensuring that Delta continues to operate all flights with no disruptions" Renkel said.
The pilots' negotiators have asked management for assurance that the company will not take away employee retirement benefits. But, Renkel said, the company has declined to "give any further assurances about their intentions."
About 650 Delta pilots live in Utah, primarily in Wasatch and Summit counties.
How the company plans to keep flying
Reduce pay
* Employee pay and benefits will be reduced
Close hubs
* The Dallas/Fort Worth hub will close by Jan. 31, 2005.
Cut jobs
* Up to 7,000 jobs will be cut in the next 18 months. The effect on Utah's 4,500 employees is unclear.
Save money
* The airline will find $5 billion in cash savings by 2006.
Simplify the fleet
* The complexity of Delta's fleet will be reduced by retiring four types of aircraft in the next four years.
Increase efficiency
* The airline will seek significant efficiency and productivity improvements in the next 36 months.
Involve employees
* Employees will be offered profit sharing of some sort.
Shift routes
* More than half the airline's routes will be restructured by 2005.
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