Delta plans to cut jobs, juggle hubs.

Byline: From Register-Guard and news service reports

ATLANTA - Delta Air Lines Inc., calling bankruptcy ``a real possibility,'' will cut as many as 7,000 jobs and retrench in Texas as part of a plan to shave $5 billion in costs by 2006.

Delta, the third-largest U.S. carrier, will eliminate most flights at its Dallas-Fort Worth hub and increase service in Salt Lake City, Atlanta, and Cincinnati, CEO Gerald Grinstein told workers in a speech broadcast over the Internet. The carrier will boost the number of planes operated by its low- cost Song unit by a third.

The cost-cutting will have no effect on the airline's twice-daily Delta Connections flights between Eugene Airport and Salt Lake City, said Philip Gee, spokesman for SkyWest Airlines. SkyWest, a Delta contract carrier based in St. George, Utah, operates the 50-seat regional Delta Connections jets.

Gee said Delta will expand its hub in Salt Lake City by 60 flights and directly serve an additional 13 cities. That will give Eugene users of Delta Connection flights a greater choice.

For example, under the new scenario, a passenger leaving Eugene for Tampa, Fla., will fly to Salt Lake and then directly to Tampa, instead of flying to Delta's Dallas-Fort Worth hub, and then on to Tampa.

"If anything, this will improve air travel for passengers who fly to Salt Lake," Gee said.

Grinstein is seeking to avoid bankruptcy after losses totaling $5.6 billion between 2001 and 2003. The Atlanta-based company still needs concessions worth $1 billion annually from pilots, including a 35 percent pay cut and pension changes, and has been in talks with their union for more than a year.

``As we are today, we cannot compete effectively and succeed long-term in the marketplace,'' Grinstein said on the Webcast. Delta needs to settle at least some issues with its pilots by the end of the month, when a round of retirements could ground planes and disrupt operations, he said.

U.S. airlines have lost money each year since 2001, when terrorist attacks deepened a travel slump, followed by the Iraq war, an airborne respiratory virus and record jet-fuel prices.

Delta is cutting 92 percent of its flights at Dallas-Fort Worth, its fourth-largest base, where AMR Corp.'s American Airlines is the major carrier with 65 percent of the flights. ``The losses there have continued and they are at an unacceptable level,'' Grinstein said.

The largest portion of the job cuts, about 2,000, will be in the Dallas area. Overall, the job cuts amount to 12 percent of workers at Delta.

The job cuts, which exclude pilots, will occur as much as possible through buyouts and attrition, Grinstein said. There will be ``significant'' pay cuts for remaining workers, he said, declining to be specific.

Delta had the third-highest unit operating costs among the 10-largest U.S. carriers in the second quarter.

The company's $1.65 billion second-quarter loss was its largest quarterly loss ever, and included a write-off for $1.5 billion in tax credits. Delta had $1.97 billion in cash at the end of June, down from $2.45 billion three months earlier and $2.7 billion at the end of last year, according to an Aug. 9 filing with the Securities and Exchange Commission.

The odds of Delta filing for bankruptcy protection from creditors are 2 out of 3, Credit Suisse First Boston analyst James Higgins said in a report Wednesday.

The pilots union has rejected Delta requests for $1 billion in annual concessions, and last month accused the airline of trying to `gouge'' its members. The union wants concessions from vendors, suppliers, creditors and other employees.

The company is negotiating to lower the debts costs with creditors holding about a quarter of the carrier's $13 billion in debt, Grinstein told reporters.

CAPTION(S):

Two Delta jets operate at Dallas-Fort Worth International Airport, where flights will be reduced.