Delta plans $1.2bn in cost cuts

Washington DC
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Delta Air Lines will trim $1.2 billion in structural costs from its operation over the next two to three years.

Executives at the Atlanta-based carrier say that these will be achieved by removing 75% of its 50-seat regional jet fleet by 2015, replacing older aircraft and early retirements, during an earnings call today.

Paul Jacobson, chief financial officer of Delta, calls the removal of the 50-seat RJs "one of the single largest opportunity cost reductions" at the airline, during the call.

Delta plans on removing at least 218 of the small jets from its regional fleet for a total of 125 and replacing them with 88 110-seat Boeing 717-200s in its mainline operation and 70 76-seat RJs at its regional partners.

The carrier declines to detail the timeline for the swap, but executives say that they have a "clear path."

Delta is scheduled to receive 16 717s from Southwest Airlines subsidiary AirTran Airways in 2013, 36 in 2014 and 36 in 2015.

The cost reductions will not include job cuts, say executives.

The airline will also continue to maintain its focus on improving PRASM and strict capacity management in the coming years, says Richard Anderson, chief executive of Delta.