Delta Works to Achieve Targeted Cost Cuts
By Harry R. Weber< Associated Press
COLLEGE PARK, Ga. – Tough decisions may have to be made, but Delta Air Lines Inc. is committed to doing whatever is necessary to achieve the remaining $1 billion of its targeted cost cuts, Chief Executive Gerald Grinstein said Thursday.
“There is no area that will be safe from scrutiny,” Mr. Grinstein told shareholders at the struggling carrier’s annual meeting.
Mr. Grinstein said the nation’s third-largest airline is on target to achieve a total of $5 billion in annual cost savings by the end of 2006, though he did not specify what beyond its previous initiatives it will do to reach that goal.
The Atlanta-based company’s meeting included a passionate speech from the head of its pilots union about the sacrifices pilots made to save the company last fall from bankruptcy, a threat Delta again faces just seven months later.
There also were frequent interruptions from a wealthy shareholder who has been outspoken at several companies’ annual meetings in recent years.
“It’s moments like these that test men’s souls,” Mr. Grinstein said after a series of rants by shareholder Evelyn Y. Davis, of Washington, D.C.
Three company proposals were approved at the meeting while six shareholder proposals were rejected.
More than 100 pilots with Delta subsidiary Atlantic Southeast Airlines picketed outside the convention center where the meeting was held. They are unhappy about the failure to get a new contract with Delta. At issue in the ASA negotiations with Delta are schedule, wages and retirement benefits. ASA pilot Tom Zerbarini said the two sides’ next session is Monday.
Some analysts have speculated that Delta might sell its regional carriers ASA and Comair Inc. to raise cash.
The proposals approved at the meeting included election of nine Delta directors and ratification of the appointment of the company’s independent auditor.
Shareholders also approved a Delta proposal doubling to 900 million the number of shares of common stock it is authorized to issue and reducing the par value of the common stock from $1.50 to 1 cent.