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Delta joins Northwest in flight cuts

  • Story Highlights
  • Delta estimates that fuel could cost $4 billion more in 2008 than in 2007
  • Northwest announced Tuesday it was cutting back on domestic capacity 8.5 percent
  • Delta and Northwest tout merger as justified, given the high fuel costs
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From Laura Batchelor
CNN
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NEW YORK (CNN) -- A day after Northwest Airlines announced it was scaling back domestic flights, Delta Air Lines did the same Wednesday -- announcing a 3 percent cut for the second half of 2008.

Delta's decrease comes on top of a 10 percent reduction in capacity announced by the airline in March. But rising fuel costs made additional cuts necessary, the Atlanta-based company said Wednesday.

Delta estimates that fuel could cost $4 billion more in 2008 than in 2007. The airline has implemented fare increases, a hedging program that allows the company to get contracts on oil prices below the market rate, and offered early-retirement incentives to employees to help cover the higher than expected fuel cost, according to a Delta spokesperson.

High fuel prices have caused cutbacks throughout the airline industry. This year, United, Continental and US Airways also have announced plans to ground flights because of costs.

On Tuesday, Northwest Airlines announced it was cutting back on domestic capacity 8.5 percent in the fourth quarter due to oil prices.

Delta and Northwest say their much anticipated merger will help the companies and customers.

"The unique advantages created by the combination of Delta and Northwest are even more compelling as fuel costs continue to rise," Delta chief financial officer Edward Bastian said in a written release.

Northwest CEO Doug Steenland also said the high price of fuel further justifies the merger.

All About Delta Air Lines Inc.Northwest Airlines Corporation

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