As part of the larger Delta Air Lines [DALQ] bankruptcy, Comair last week announced a second round of layoffs, salary cuts and plans to return up to 30 aircraft.

Although Comair is a wholly owned Delta subsidiary, Delta is imposing a new fee-for-departure schedule on the regional unit as part of Delta's efforts to trim $3 billion from its bottom line by 2007. Delta wants Comair to cut $70 million from its annual operating costs.

As part of a schedule adjustment announced last month just before Delta's Chapter 11 filing, Comair service from its Cincinnati hub will be reduced by 25 percent with the December schedule. Comair at that time anticipated a potential layoff of 350 employees.

Last week, Comair announced that instead of flying its 174 planes fewer hours as part of the new schedule, the carrier would return at least 11 airplanes. If it cannot obtain new, less expensive leases, Delta will remove up to 30 aircraft from the Comair fleet. While the first 11 planes will be 50-seat RJs, the others could be as large as the 70-seat Bombardier [BBD] CRJ 700.

With the smaller operation, Comair will a trim an additional 650 employees from its payroll beginning in December. The combined layoff of 1,000 represents 14 percent of the carrier's 7,000 workers.

In a message to Comair employees, CEO Fred Buttrell said that the company would impose salary cuts on executives and non-union employees. Salary cuts of 7 percent to 15 percent will be imposed on the executives in November. Buttrell will be taking a 15 percent pay cut on top of a 10 percent cut he took earlier in the year. The non-unionized customer service agents will have their salaries cut by 4 percent in December and a new pay structure put in place.

Comair will open new concession talks with the unionized pilots, flight attendants and mechanics. While the pilots earlier this year agreed to a salary freeze, which took effect in June, Buttrell is now seeking $17.3 million is salary givebacks from the pilots. The flight attendants are being asked to take $8.9 million in wage reductions and the mechanics will be asked to give back $1 million.

As Comair - and Delta - exit bankruptcy, Buttrell said he hopes the carrier will be positioned to fly more 70-seat aircraft - and potentially larger planes. "During and after restructuring, Comair's ability to succeed will center on our ability to deliver customer service excellence and to build a cost-competitive platform that will make Comair competitive on all fleet types." >>Contact: Comair, (859) 767-1500.<<