Delta President Says US Airline Cuts Costs to Offset High Fuel Prices

Delta Air Lines Inc. plans to cut costs to deal with higher fuel prices, a senior official told investors on Tuesday, but he offered little insight into whether the third biggest U.S. air carrier will combine with another airline.

President and Chief Financial Officer Ed Bastian said at an investor conference in New York that the board of the Atlanta-based company is still evaluating whether to enter into a deal.

Bastian said the value to shareholders of remaining a standalone carrier versus a combination are being considered. He did not say when the review would be complete, and analysts at the conference did not ask him to elaborate.

Cost cuts will be key to helping Delta deal with higher fuel prices, Bastian said, noting that jet fuel prices are up nearly 50 percent since the beginning of 2007.

Bastian said Delta will cancel or reduce flying of some aircraft. Capacity for 2008 is expected to still be up 2 percent, reflecting a decline in domestic capacity of 4 percent to 5 percent and an increase in international capacity of 15 percent, Bastian said. By 2009, Bastian said, 40 percent of Delta’s flying will be on the international side.

Delta has initiated a hiring freeze on any non-customer facing positions. It also wants to improve self-service kiosk options for customers and increase the number of people buying tickets online, Bastian said.