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Delta taking steps to cope as fuel rises

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ATLANTA — Delta Air Lines Inc. will be overhauling its business plan to deal with soaring fuel prices, the chief executive of the nation's third-largest carrier said Friday.

CEO Richard Anderson did not provide any details in a recorded message to employees, including whether the "comprehensive" plan to be announced next week will include job cuts.

Atlanta-based Delta, which has a Salt Lake City hub, has already cut domestic flights, eliminated some routes and tried to conserve fuel as the price of a barrel of oil has soared over the last year from $60 to $111 this week, Anderson said. Jet-fuel prices have soared 86 percent in the past year.

Spokeswoman Chris Kelly declined to comment beyond Anderson's message to employees.

Delta president Ed Bastian is expected to speak at an investor conference Tuesday.

In the recording, Anderson did not mention consolidation talks between Delta and Northwest Airlines Corp, based in Eagan, Minn.

A deal to combine the two carriers, which at one time had been projected to be worth $20 billion, has been held up by an inability of the two airlines' pilots unions to reach a deal on integrating their seniority lists.

Leaders of the two unions aren't currently meeting but remain in communication. It's not clear when they will meet again.

Anderson said Delta has to operate cautiously during uncertain financial times that have seen fuel prices increase dramatically. He said Delta already has trimmed some selected domestic routes at off-peak times while growing international capacity.

Anderson said the company will make other reductions when necessary.

He said the company will role out a more comprehensive plan "in reaction to changes in the marketplace."

"Stay tuned," Anderson told employees. "We're going to have a lot more information out next week about our business plan in light of the fuel prices we're facing."

Jet fuel for immediate delivery in New York Harbor rose 0.6 percent to $3.47 a gallon, the fourth straight day it has set a record. Jet-fuel prices have exceeded labor as the biggest expense for many airlines, including Delta.

To combat fuel expenses, Anderson said it's "important we pass on costs like other businesses do."

"When you go to the gas station to fill your car up, there's not someone from Exxon standing there with a coupon," Anderson said. "We can't do that in the airline business, either."

UAL Corp.'s United Airlines increased round-trip fares as much as $50 late Thursday, and Continental Airlines Inc. followed Friday, the fourth increase in as many weeks by major U.S. carriers. Delta has "taken no action at this time," Kelly said Friday afternoon.

Contributing: Bloomberg News.