Delta Air Lines chief executive Ronald W. Allen, who led the carrier into a costly European expansion and an aggressive cost-cutting campaign, will leave the nation's third-largest carrier at the end of July.
Delta said Monday that Allen, 55, was retiring and would resign from the board of directors. The surprise move coincides with the expiration of Allen's current employment contract on July 31.Maurice W. Worth, the 56-year-old executive vice president for customer service, was named the acting chief operating officer and given day-to-day authority to run the airline.
The airline, which was reported to be in talks to buy Continental Airlines earlier this year, will continue with plans to grow internally rather than through acquisitions, said Gerald Grinstein, a member of the board who will head the committee assigned to find a successor.
"My personal goals during the past three years were to lead Delta Air Lines back to sustained profitability and position our company to be poised for growth - to make Delta a leader. Delta has realized great progress in both of these areas, and the company is in excellent condition," Allen said.
Allen engineered Delta's purchase of most of Pan Am's European operations in 1991. The deal lifted Delta from a relatively minor carrier on trans-Atlantic routes, but the routes took years and many retoolings to start making money. Allen instituted a cost-cutting program that helped the airline start making money again in 1994, after four straight years of losses.
"Ron Allen has done a terrific job of leading Delta through the most difficult time in its history, and the company has emerged as a leader in world aviation," Grinstein said.
Grinstein said the board would continue with a strategy of keeping costs down while building on U.S. and international route networks.
"We will look for the best person available - from inside or outside Delta - to lead Delta into the future," said Grinstein, former head of Western Airlines and Burlington Northern Sante Fe Corp., who has been on Delta's board since 1987.
Worth is one of three executive vice presidents at Delta who serve on the executive council - formed in 1995 to set corporate policy and strategy - with Allen.
Delta's stock was up $1.50 per share at $96 Monday morning on the New York Stock Exchange.