ATLANTA (AP) -- Delta Air Lines Inc., the third biggest U.S. carrier, said it will restructure its technical operations division in a move to save $240 million (euro185.67 million) over five years.
The airline, which has been trying to cut costs, said Tuesday in a filing with the Securities and Exchange Commission that it plans to hire two suppliers for heavy maintenance work, resulting in a 34 percent cost reduction. Delta said Miami-based Avborne will work on its MD-88 and MD-90 fleet types, while Vancouver, British Columbia-based Air Canada Technical Services will work on the 757 and 767 fleets.
Atlanta-based Delta said it will be responsible for monitoring proper execution of its maintenance program by the vendors. The company said in its filing that the moves announced Tuesday will contribute to its previously announced elimination of 1,600 to 2,000 jobs in its technical operations division.
Delta spokesman John Kennedy declined to elaborate on the exact number of jobs affected by the moves. However, the company said in its filing that the cuts are part of Delta's plans announced in September to cut 6,000 to 7,000 positions throughout the company over 18 months.
Last week, chief executive Gerald Grinstein told investors at a conference in New York that Delta will have to further cut costs to deal with increases in fuel prices because raising ticket fares alone will not do the job.
Grinstein said he believes Delta can avoid a bankruptcy filing, though he indicated that it hasn't ruled out such an option.
The job cuts announced last September were on top of 16,000 jobs it slashed since 2001. In October, Delta won $1 billion (euro770 million) in concessions from its pilots.
The concessions helped Delta avoid a bankruptcy filing last fall. But the specter of bankruptcy rose again on March 10 when Delta warned that it will post another substantial loss this year.
Current cost cuts apparently have not been enough to sustain the airline because of rising fuel prices. Grinstein said that because of the fuel increases, Delta expects to take a $900 million (euro696.27 million) to $1 billion (euro770 million) hit, perhaps even more.
In a memo to Delta's technical operations employees, Tony Charaf, the division's senior vice president, said, ''We must review our options to survive, to make certain we are doing what we can to keep this airline going.''
Delta shares rose 5 cents to $4.03 in morning trading Tuesday on the New York Stock Exchange.
The third largest U.S. airline is still working hard to avoid a bankruptcy reorganization filing, but the CEO reiterated there are risks affecting Delta's ability to do that.
Delta Air Lines Inc. is prepared to use the bankruptcy court to achieve $325 million in cost concessions from its pilots if the company and union can't reach a deal on their own.