ATLANTA — Delta's discount carrier is performing better than expected, and the struggling airline's cost-cutting plan is on target despite a continued standstill in negotiations to reduce pilot wages, executives said Wednesday.
Delta Air Lines, which operates a hub at Salt Lake City International Airport, launched discount carrier Song in April. On average, its flights are 75 percent full, and more planes soon will be added, said Song president John Selvaggio.
"We're very satisfied with our progress to date," Selvaggio said in a telephone interview. "Even though we've added seats, our load factors are above what we planned."
Delta president and chief operating officer Fred Reid said Wednesday that Song should help the airline on its path back to profitability. The Atlanta-based airline expects to be able to deliver $1.3 billion in savings by the end of this year and is on target to meet its full cost-cutting plan by 2005.
But pilot wages remain a sticking point. Delta wants to cut pilot wages by 22 percent and rescind a 4.5 percent raise pilots received in May and a similar raise they will receive next year.
Last month, negotiations between the two sides broke down. No new talks are scheduled, but Reid said he is hopeful the two sides will come come back to the table soon.
"We do respect the right of pilots to decide whether to accept a midcontract amendment," Reid said.
Delta, which lost $1.3 billion last year, has said the wage cuts are necessary to help the airline return to profitability.
As for Song, Reid said the discount carrier's cost-efficient style is rubbing off on Delta itself. He said Song has been able to keep costs low because of lower staffing requirements, quicker turnaround times and better aircraft utilization.
Reid said each Song aircraft is used about 13 hours a day compared to 10 hours on Delta planes.
Shares of Delta closed up 21 cents, at $12.27, on the New York Stock Exchange.
We're very satisfied with our progress to date. Even though we've added seats, our load factors are above what we planned.