Delta to cut 2,000 jobs

By Mark McSherry

NEW YORK (Reuters) - Delta Air Lines Inc unveiled plans to cut 2,000 jobs and scale back flights on Tuesday, leading efforts by U.S. carriers to cut costs in the face of soaring fuel prices and a weakening economy.

The No. 3 U.S. airline, which has been unable to seal a merger with rival Northwest Airlines Corp, will offer voluntary retirement and buyout packages to 30,000 employees.

It is aiming to cut 1,300 rank and file jobs and 700 administrative and management jobs, or more than 3 percent of its work force overall.

"If we need to, we'll go deeper," Delta Chief Financial Officer Ed Bastian told analysts at a JP Morgan investor conference on Tuesday, referring to the cost-saving plan.

Delta shares, which have been on a slide for the last month, as hopes for a merger recede, rose about 8 percent to $9.95 on the New York Stock Exchange.

In a regulatory filing, Delta also said it will cut flights in the United States, aiming to reduce 2008 domestic capacity by an additional 5 percent by August, resulting in a 10 percent year-over-year capacity cut.

Delta planned to take 15 to 20 mainline aircraft and 20 to 25 regional jets temporarily out of service. It also identified $200 million in capital expenditure to be deferred or eliminated.

Delta has been looking actively at mergers for the past two months, but hopes for a deal took a blow earlier on Tuesday, as Delta's pilot union said it could not reach agreement over seniority with pilots of the potential merger partner, widely reported to be Northwest Airlines Corp.