Delta's CEO and president both announced more job cuts and reduction in the amount of flights offered in an attempt to salvage their company. Delta plans to reduce the frequency of certain flights in certain markets that have had continual low returns. Delta has also recently had 2100 employees opt for an early out or retirement package.
In these turbulent financial times the air line industry has greatly suffered. Since people are refusing to go out and spend money it is hard to get the normal consumer to fly somewhere for vacation. I recently decided to take the 10 hour drive to Miami versus flying because in the end it was cheaper for me to simply spend $60 in gas (hybrid car hehe) versus spending hundreds of dollars on a more expedient flight down to Miami. Decisions like mine have greatly impacted companies like Delta. Delta may be able to hedge against certain risk like fluctuations in gas prices, but it is extremely tough to hedge against risks where people simply don't use your product.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment