Delta To Discontinue Portland, Ore., Service To Tokyo And Nagoya, Japan

Beginning April 1, 2001, Delta Air Lines will discontinue two daily round-trip flights to Tokyo and Nagoya, Japan from its Pacific gateway in Portland, Ore. Portland will remain an important domestic market for Delta.

Delta will strengthen its Asia network by replacing the Portland-Japan service with one daily round-trip flight to Tokyo from New York JFK and one daily round-trip flight to Nagoya from Los Angeles effective April 1, pending notification to U.S. and Japan government authorities.

"Patterns of flights to Asia have changed fundamentally in the past few years as a result of the 1997 U.S.-Japan bilateral agreement, reducing the viability of our gateway in Portland," said Leo F. Mullin, Delta chairman and chief executive officer. "Capacity to Japan has increased by nearly 25 percent, but much of the traffic is being carried nonstop from interior hubs, bypassing the West Coast.

"We have examined every available business option to determine if our previously successful Portland gateway could achieve long-term profitability," Mullin said. "The economic factors are global, not local. We were obligated to conduct an extensive review of our Portland Pacific service because these economic changes have affected our revenue and profit performance. Despite the outstanding efforts of Delta people in Portland and the full cooperation of the Oregon and Portland governments and business community, the review showed conclusively that Delta’s gateway operation in Portland would continue to underperform financially."

Until 1997, most customers traveling to Japan from interior markets in the United States flew to the West Coast and connected to flights from gateways like Portland. The aviation treaty with Japan changed in 1997, allowing U.S. airlines to fly nonstop to Japan from cities in the interior of the United States. The ability of new carriers to fly nonstop from cities like Atlanta, Newark, Chicago and Houston has provided more attractive alternatives for customers to fly to Japan. As a result, the performance of the Portland gateway has weakened.

While Portland will remain an important domestic destination for Delta, the decision to discontinue the international flights also will reduce domestic flights that supported the international service. On April 1, Portland’s domestic schedule will be reduced from 24 departures serving 12 U.S. markets to 15 departures serving five markets -- Delta’s four hubs at Atlanta, Cincinnati, Salt Lake City and Dallas/Fort Worth; and one-stop service via Seattle to Delta’s transatlantic gateway at New York’s JFK airport. Reductions in domestic routes will free aircraft for other, more profitable routes.

Delta expects to reduce its Portland area employment to approximately 870 positions from 1,200 positions as of April 1. Pilot and flight attendant bases in Portland will operate at reduced levels beyond April 1, although the pilot base will be phased out in 2002.

"We realize this decision touches the lives of all 1,200 Delta people at Portland," Mullin said. "There will be a job in the Delta system for every Portland-based Delta employee affected by this transition. If those jobs are not attractive to all who are affected, we will offer other options to help in the transition."

The schedule changes are expected to improve Delta’s financial performance. Losses in the past year from the Japan flights and the related Portland domestic service totaled more than $10 million. Delta expects to take a one-time charge associated with this action in the quarter ending September 30, 2000.

Delta's goal is to become the #1 airline in the eyes of its customers, flying passengers and cargo from anywhere to everywhere. Passengers already choose to fly Delta more often than any other airline in the world on 5,244 flights each day to 339 cities in 48 countries on Delta, Delta Express, Delta Shuttle, the Delta Connection carriers, and Delta's Worldwide Partners. Delta is a founding member of SkyTeam, a global airline alliance which provides customers with extensive worldwide destinations, flights and services