How to Uninspire Via Memo
“To: Delta Air Lines Colleagues Worldwide
“From: Richard Anderson and Ed Bastian
“Subject: Delta to Manage 2009 Capacity Due to Global Economic Slowdown and Softening Traffic
“As always, we want to make certain that Delta people are the first to know about changes to our business. That is why we are sharing with you now that later this morning at an investment conference in New York, we will announce plans to decrease systemwide capacity, for both Delta and Northwest, during 2009. This action comes as a result of the global economic recession and weaker demand for air travel.
“Systemwide 2009 capacity will be down 6-8% year over year. Domestic capacity will be down 8-10% and international capacity will be down approximately 3-5%. These numbers include the full impact of previously announced 2008 capacity reductions.
“Delta has established itself as an industry leader. Once again, Delta must take the necessary steps to adjust our business accordingly and make certain seat capacity meets customer demand. These economic hurdles are difficult, and we remain committed to building our company on a durable financial foundation with industry-leading liquidity. Remember that speed wins so we will be decisive and not delay. As Rules of the Road states, ‘Speed in execution is the difference between success and failure.’
“Even with the economic recession, we are achieving significant benefits from our merger and will continue to do so. The merger has allowed us to develop growth opportunities as we connect the networks to create new revenue streams neither airline could have achieved independently. We will continue to follow the Flight Plan to invest in and further diversify our international network in the Pacific, Africa, India and the Middle East to help mitigate the risk from specific regional economies. We will remain focused on, and continue to adapt to, the rapidly changing global economy to better align supply with demand.
“We are taking these actions to secure your careers and return us to sustained profitability. In the meantime, we are analyzing the impact on staffing as it pertains to these capacity reductions and, as in the past, we will offer voluntary programs to adjust staffing needs. We will continue to make decisions that are in the long-term interest of our colleagues, customers, shareholders and the communities we serve.
“Thank you for your focus in executing on the Flight Plan, in spite of fuel at record levels earlier this year and now the unfolding economic recession. We have a solid cash balance, best-in-class cost per available seat mile (CASM) and your operational performance is head and shoulders above the rest of the industry. We thank you for the incredible work you do for our customers every day. Together, we will get through this new challenge and build a stronger Delta.”