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Copyright 1996-2004 Elliott Publishing. All rights reserved.

Delta's Recovery Plan
Memo of the Week · August 19, 2004

Delta Air Lines recently admitted it was in dire financial shape and could file for bankruptcy. How to turn things around? CEO Jerry Grinstein sent this internal memo to his employees outlining his plan. (Remember, if you have a letter or memo you'd like us to publish, please e-mail it to us.)

Internal Memorandum

Date: August 18, 2004

Today we presented our strategic assessment and recommendations to Delta Air Lines Board of Directors, and I am pleased to report that the development and implementation of our Transportation Plan is on track.

Appreciating that we are not in a cyclical downturn, but in a permanently and fundamentally changed aviation marketplace - due, in part, to changed customer preferences, low-cost carriers, and online fare shopping - we set out to devise a strategy that addresses industry realities and sets us firmly on course for long-term viability.

What you will see immediately and over the course of the coming days, weeks and months is the rollout of the Delta Solution, a strategy that capitalizes on our unique strengths, tool and resources. And make no mistake, despite the precariousness of our financial situation, we have significant strengths - Delta's people and the customer loyalty their superior service inspires, and our cutting-edge, passenger-friendly technology are among our advantages.

Decisive and comprehensive, this is a 360-degree plan which, when complete, will transform our product, fleet, network and cost structure into an airline that is designed to carve out new and previously uncharted network airline territory. Our goal is to reclaim our passenger-preferred stature by exceeding customer expectations with a revitalized, viable operation.

The motivation behind Delta's bond response has been to "do it once and do it right." This comprehensive approach means more change for all of us. When our plan is successfully implemented, we will be the leaner, simplified, more productive airline we must be in order for us to survive and compete. Regrettably, one of the consequences will be fewer jobs and additional changes to pay and benefits for all of our employees as we make operational changes to achieve the necessary cost savings.

Understanding what is required to become cost-competitive and viable, I am committed to the principle that the people of Delta must have the opportunity to share in any success their sacrifice helps make possible. Today, the Board reviewed the employee reward plans we are now developing. A combination of equity, profit sharing and incentive payouts tied to performance and productivity is being designed to provide multiple opportunities for Delta people to benefit meaningfully, and soon, as we work together to reinvent and reinvigorate our airline. Fundamental to our future, collective success is your ability to share in the rewards your hard work and sacrifice made possible.

You will be receiving detailed information about the anticipated changes and the reward plans as soon as they are finalized.

Jerry Grinstein

Got a letter or memo to share? Send it to us. All submissions will remain completely anonymous.