Includes Further Cost Cuts, Lower Fees/Taxes, And Regulatory Openness to Restructuring

The federal government should assume aviation security costs immediately as a matter of national defense, lower air travel taxes and enable appropriate industry restructuring, while airlines heighten their cost reduction efforts-- so says Delta Air Lines Chairman and CEO Leo F. Mullin in remarks before the Economic Club of Chicago.

"An industry structure that does not allow financial success for most of its participants can no longer be allowed to prevail," said Mullin. It is possible, Mullin asserted, for carriers that are currently solvent to survive, but only if three major actions are undertaken immediately. The three-point plan includes:

1 - Airlines must continue cost reduction efforts.

"Airlines must continue a program of cost reductions that outsizes any undertaken in its history, fundamentally restructuring the way we do business internally," Mullin stated. Employee numbers have already been reduced, said Mullin, and labor contracts are being reopened at most airlines. Airlines also need support from suppliers, financial organizations and airport operators, he added.

2 - Government should assume aviation security costs, lower taxes/fees.

The government should re-set policies that are financially punishing the airline industry, Mullin said. Government-imposed security changes had an approximately $4.3 billion negative impact on the industry.

"These costs are appropriately part of national defense. Airlines, like all other industries, should be released from this unique burden," Mullin said. "For our industry to recover, the government must remove both the unique burden of national security costs and the punishing level of taxation that continue to hobble the airlines' self-help efforts."

3 - Government should enable appropriate restructuring.

The government should enable appropriate industry restructuring to take place, as well as possible mergers, alliances, or asset sales among the various carriers in the industry. "All governmental assumptions about appropriate industry stimulus need to be re-examined," said Mullin.

"I strongly believe that this three-step program can and will bring the industry back to its feet," said Mullin. "Decision makers, particularly in the public sector, know full-well that our country crucially needs a vibrant aviation system to serve as the engine for a healthy economy."

Delta Air Lines, the world's second largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offers 5,619 flights each day to 438 destinations in 78 countries on Delta, Delta Express, Delta Shuttle, Delta Connection and Delta's worldwide partners.

FMI: http://www.delta.com