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Delta cutting capacity, blames rising fuel prices, H1N1 virus

  • Story Highlights
  • Delta Air Lines to cut flight capacity by 10 percent
  • Executives blame swine flu, rising gas prices for losses
  • Cutbacks also mean some international flights will be suspended
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ATLANTA, Georgia (CNN) -- Delta Air Lines announced plans Thursday to reduce its system capacity by 10 percent as compared to 2008, due to declining revenues. The company initially said it planned to cut capacity by 6 to 8 percent.

In a memo released to the company's 70,000 employees ahead of an investor conference in New York, Delta, the world's largest airline, said passenger revenues have fallen 20 percent in the first four months of 2009 compared to the same time last year. Executives attribute the drop-off to rising jet fuel prices, combined with declining air travel.

Additionally, Delta President Ed Bastian said part of the revenue losses are due in part to the swine flu. Bastian said Thursday the airline will see a drop of $125 million to $150 million during the second quarter because of the H1N1 virus and its impact on travel.

Delta is also cutting its weekly frequency between Atlanta and Detroit to Mexico City due to the flu's impact on consumers' travel plans.

Delta also said it's reducing its international travel schedule. The airline will trim its international capacity by 15 percent; an increase from the 10 percent previously announced. Nonstop service from Atlanta to Seoul and to Shanghai, as well as Cincinnati to Frankfurt and to London-Gatwick will be suspended, among others.

The capacity cutbacks could mean additional job cuts at the Atlanta-based airline. Although Delta told its employees it must "reassess staffing needs," spokeswoman Susan Elliott said the company's goal is to prevent involuntary furloughs for frontline employees.

CNN's Vivian Kuo contributed to this report.

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