Delta Air Lines Inc. Chief Executive Gerald Grinstein said Thursday he plans to step down soon after the nation’s No. 3 carrier emerges from bankruptcy protection.
Grinstein also said the company has no plans to sell its regional subsidiary Comair and he does not anticipate any more big layoffs.
In wide-ranging comments, Grinstein said during a stop in New York that while he received “feelers” from UAL Corp.’s United Airlines about a possible merger 18 months ago, he quickly rejected them. He reiterated that Delta has no plans for a merger and that, in his view, predictions about coming acquisitions and consolidation in the industry are likely wrong in the near term.
Grinstein on Thursday announced expanded and new international service, part of Atlanta-based Delta’s continuing makeover into an international-focused carrier. Much of the industry is increasingly looking overseas as a way to boost revenue growth and cope with competition from domestic low-cost carriers.
So far, Delta’s expanded international service has been ahead of expectations, Grinstein said. The airline has pulled its unit revenue close to the industry average, after running about 14 percent below average in 2005, according to Delta Executive Vice President Glen W. Hauenstein.
Delta is still on track for an exit from Chapter 11 bankruptcy protection in the first half of 2007, Grinstein said. Soon after, he plans to retire, he said. He didn’t give a date.
“I think it’s quits this time,” he said. The board has not yet decided on his successor, he said.
Asked about the future of Erlanger, Ky.-based Comair, which feeds passengers into Delta’s mainline operations, Grinstein said he has no plans to sell it, but “I don’t want to prejudge that.”
He said Delta needs the feeder service that Comair provides but does not necessarily have to own it.
As for the prospect of more job cuts, Grinstein said the company is “quite close to where we want to be.” He said there will be additional “fine-tuning,” but he doesn’t expect any announcements for layoffs involving thousands of workers.
Since 2001, Delta has announced plans to cut up to 33,000 jobs.
Looking ahead, Grinstein said he thinks the airline industry will look much the same in two years as today, with about the same number of network carriers and hubs. That runs against healthy speculation of possible mergers; United Airlines’ reported hiring of an investment bank last month helped fuel the rumor flames.
If consolidation does occur, Grinstein said it could happen as airlines acquire portions of others, rather than swallowing whole companies.
Even if it does occur, he said it would not necessarily create a cascade that forces everyone to follow.
“If you go back over the (the industry’s) history, you see lots and lots of mergers,” he said, “and very few of them were successful.