Delta: Global Recession, Rising Oil Prices Forcing Additional Changes to Business

/PRNewswire/ -- Delta Air Lines (NYSE:DAL) today issued the following memo to its more than 70,000 employees worldwide from CEO Richard Anderson and President Edward H. Bastian.

To: Delta Colleagues Worldwide

From: Richard Anderson and Ed Bastian

Subject: Global Recession and Rising Oil Prices Forcing Additional
Changes To Our Business


We are all seeing negative impacts from the global recession and rising oil prices not only in the news, but also in our communities and personal finances. Clearly, the airline industry is not immune. Industry passenger revenues have declined nearly 20 percent in the first four months of the year compared to the same period in 2008. That trend is expected to continue in the near term. On top of this, cost pressures from rising jet fuel prices - up more than 20 percent since the start of the year - coupled with softer travel demand due to the spread of the H1N1 virus, have created a difficult business environment.

These forces that are affecting the industry are creating significant headwinds for Delta. Declining revenues will overtake the more than $6 billion in total benefits we expected this year from lower year-over-year fuel prices, merger synergies and capacity reductions.

This morning, at an investor conference in New York, we will announce additional steps to align our capacity with market demand, preserve liquidity, and ensure Delta's long-term success. This plan includes reducing our system capacity by 10 percent compared to 2008. Capacity reductions will begin in September. In this environment, our merger makes more sense than ever and we will continue to accelerate our integration, as it gives us a competitive advantage and strengthens our financial foundation. We also will maintain tight controls on our costs and capital spending.

Customer demand for international travel has fallen significantly. Accordingly, we plan to reduce our international capacity by an additional 5 percent from what we announced in March, for a 15 percent total reduction in international capacity. This fall's capacity reductions will target routes that have experienced losses in the current economic climate and with higher fuel prices, including:

-- Suspending nonstop service from Atlanta to Seoul and Shanghai and
instead routing customers for these flights over Detroit or Tokyo, or
on nonstop SkyTeam partner flights.
-- Suspending nonstop flights from Cincinnati to Frankfurt and
London-Gatwick. Cincinnati customers will still be able to reach these
and many other international destinations via our other European
gateways.
-- Suspending nonstop service between New York-JFK and Edinburgh.
-- Reducing weekly frequencies connecting Atlanta and Detroit to Mexico
City and postponing some previously planned seasonal service between
non-hub cities and Mexican beach destinations due to the impact of the
H1N1 virus on customers' travel plans.


In keeping with our long-term business plan, we continue to grow the global footprint that is a cornerstone of our successful strategy. While we must reduce capacity this year, our international capacity this fall will still be more than 20 percent larger than it was before our global expansion began in 2005, and we are adding more than 20 new markets to our international network in 2009, including:

-- Los Angeles-Sydney
-- Salt Lake City-Tokyo
-- Detroit-Shanghai
-- New York-Prague
-- Pittsburgh-Paris
-- Atlanta-Johannesburg


By leveraging the unique strengths of our network, hub structure and alliances, we continue to provide the most travel options for our customers. Additional details of network changes are available on DeltaNet.

The additional capacity reductions mean we again must reassess staffing needs. While the challenges of the current environment preclude us from making guarantees, our goal remains to avoid any involuntary furloughs of frontline employees.

We will not allow the economy to negatively affect our merger integration - in fact, the current environment gives additional urgency to accelerate our efforts. You will see us move more quickly to rebrand and consolidate facilities, repaint aircraft and ramp-up our frontline training activities.

These are tough times and people often ask what they can do to contribute. Your most important contribution is to stay focused on doing your job well. We must all continue to deliver excellent customer service, run a strong operation and execute our Flight Plan. The entire industry is dealing with a difficult economy and rising fuel prices, but no one else has the opportunities and the people to match Delta in successfully navigating this crisis. Do what you do well, and we have no doubt that we will win.

Thank you for the incredible work you do for our customers every day. Together, we are building a stronger Delta.

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Governor Perdue Appoints Working Group to Study Education Policies and Practices to Make Georgia More Globally Competitive

Governor Sonny Perdue today announced the appointment of a working group tasked with investigating innovative ways to create long-term, comprehensive education reform to make Georgia more globally competitive. This working group, chaired by Dr. Charles Knapp and Dean Alford, will build off the work of the Investing in Educational Excellence (IE2) Task Force and review a provocative national report called Tough Choices or Tough Times to determine how Georgia might reform its education policies and practices to cause needed change for its educational system.

“I believe the experts serving on this group fully understand the urgency of the challenges we face in education in Georgia,” said Governor Perdue. “I am confident that they will create a blueprint for change that will facilitate higher achievement, thereby increasing Georgia’s economic competitiveness through our most valuable resource – our children.”

The working group will meet for the first time on July 17, 2008 from 10 a.m. to 2 p.m. in the Empire Room of the West Twin Tower in Atlanta to focus specifically on several areas of education policy reform:

· Moving students to postsecondary-level work as soon as they demonstrate the necessary ability;
· Enhancing the quality of preschool education opportunities;
· Improving P-12 teacher quality;
· Creating high performance school systems (in collaboration with the State Board of Education);
· Improving the academic performance of underachieving students;
· Further enhancing and supporting a world-class P-12 curriculum; and
· Ensuring the efficient use of the financial resources Georgia devotes to education.

Governor Perdue has charged the group to identify the policy changes that should be put into place quickly in order to make Georgia’s educational system more competitive in the next 15 years. He has asked them to work swiftly and submit recommendations to him in time for consideration for possible legislation in the 2009 session of the General Assembly.
Those chosen to serve on this working group include:

·Dr. Charles Knapp – (Co-Chair), Chair of the New Commission on the Skills of the American Workforce (which produced the Tough Choices or Tough Times report), President Emeritus of UGA, and Chairman of the East Lake Foundation
· Dean Alford – (Co-Chair), Chair of the IE2 task force, former state legislator, former State Board of Education member, current member of the Technical College System of Georgia Board, businessman
· Julia Bernath – Board Member, Fulton County Schools
· Veronica Biggins – Senior Partner , HNCL Executive and Board Search Firm
· Dr. Michael Bull – Superintendent, Glynn County Schools
· Representative Brooks Coleman – Chair, Georgia House Education Committee
· Tim Connell – President, Georgia Student Finance Commission
· Kathy Cox – State Superintendent of Schools
· Stephanie Laverne Haynes - Master Teacher/Academic Coach, Clifton Ridge Middle School, Jones County
· Kelly Henson – Executive Secretary, Georgia Professional Standards Commission
· Dr. Susan Herbst – Executive Vice-Chancellor, University System of Georgia
· Molly Howard - Principal, Jefferson County High School, 2007 National School Principal of the Year
· Ron Jackson – Commissioner, Technical College System of Georgia
· Representative Jan Jones – Chair, Georgia House Education Appropriations Sub-Committee
· Senator Dan Moody – Chair, Georgia Senate Education Appropriations Sub-Committee
· Jose Perez – State Board of Education member
· Jennifer Rippner Buck – Executive Director, Governor’s Office of Student Achievement
· Dr. Holly Robinson - Commissioner, Bright From the Start – Department of Early Care and Learning
· Dr. Ben Scafidi – Associate Professor of Economics, Georgia College and State University
· Ed Smith – Superintendent, Troup County Schools
· Carl Swearingen – Chair of the Technical College System of Georgia Board, businessman
· Senator Dan Weber – Chair, Georgia Senate Education Committee
· Alvin Wilbanks – Superintendent, Gwinnett County Schools