Another Rumor: Delta Ch 11 Monday??

[Airboss]

Just copying a rumor from Airliners.net. I have heard similar stories, but once again just a RUMOR!

http://www.airliners.net/discussions/general_aviation/read.main/1789735/

This email was sent out the other day.

"We at Delta Air Lines understand there is more choice in air travel than
ever before, and we are working hard to be your preferred airline. You
may have read in the news about our transformation plan and the work we
are doing to become an even stronger competitor for your business. Delta
is committed to meeting your travel needs now and in the future.

Our goal is to create a new airline for a new era--one that is
comfortable, affordable, simple, stylish, and inviting to our customers.
In the weeks ahead, our focus will be on continuing to implement the
vision of a newly structured, customer-focused airline, with a cost
structure that allows us to compete aggressively wherever we fly.

While we strive to make your overall Delta experience more enjoyable and
convenient, we recognize that we have several hurdles to overcome to
avoid court supervised restructuring. We continue to work to avoid this
outcome. However, even if it were to happen, we will continue to provide
you with safe, secure, and reliable service both in the air and on the
ground. For example:

> Tickets will be honored, and refunds and exchanges will be made
as usual.

> The miles in your SkyMiles(r) account will not be affected, and you
will continue to have the opportunity to earn and redeem miles with
Delta and our partners just as you've always done.

> Amenities like Delta's Crown Room Club(r) will continue to be
available in select cities we serve.

> You'll still earn one mile for every eligible dollar spent and
Always Double Miles(r) on qualifying purchases made with the
Delta SkyMiles Credit Card from American Express(r).

Please visit delta.com/transform by clicking below for the latest Delta
news, more information about the improvements referenced above, and our
plans to create a better travel experience.


We welcome your feedback and suggestions via e-mail at
[email protected].

On behalf of all Delta employees worldwide, thank you for your continued
loyalty and support.

Sincerely,

Paul Matsen
Senior Vice President
and Chief Marketing Officer"

 

[sweeper]

I got that email yesterday as well....

 

[michael707767]

actually, if they are going to do it in the next couple of days, I would expect it on Sunday, like what happened at USAirways.

 

[letthebigdogeat]

"Supposedly" on Wednesday mother D advised people through letters to individual share holders who own Delta stock to sell it immediately . Just something I heard today.....

 

[Dizel8]

To tell share holders to sell is illegal, so I doubt that is true!

 

[letthebigdogeat]

Well, you do have a point there. I don't know the specifics, as mentioned above just something I heard. I do know that here at ASA, they simply took the entire option to invest in Delta stock outright away from our 401K fund options a few weeks back, not that anyone would want to at this point.

 

[~~~^~~~]

Aviation Daily


Delta's Deep Loss In Line With Warning; Cash Level Falling
By Steven Lott
10/21/2004 09:01:10 AM


Delta yesterday posted a deep $646 million loss due to high fuel prices and weak yields, and some analysts predict the airline may be within days or weeks of filing for Chapter 11 bankruptcy protection as its cash balance shrinks.

The results compare with a $164 million deficit last year but were expected after the carrier issued a warning last week that the loss could amount to $675 million. Excluding several non-cash charges, Delta lost $592 million. No matter how you slice the numbers, Delta is in a precarious position and "time is of the essence,"said CEO Jerry Grinstein.

Revenues increased 5.9% thanks to strong traffic, but yields sank 5.9% due to intense low-cost carrier competition. As a result, unit revenues fell 3.7%, and the breakeven load factor soared more than eight percentage points to nearly 87%. The airline lost about $50 million in revenue due to the four hurricanes that struck Florida and the Southeast and disrupted operations.

The airline last week canceled yesterday's conference call with analysts after it filed a report with the Securities and Exchange Commission detailing its struggles. Unit revenues for Latin America and North American routes sank 5.2% and 4.6%, respectively. Pacific RASM rose 5.2% and transatlantic unit revenues were up 2% thanks to strong traffic during the summer.

Any international revenue recovery was erased by a 15% jump in expenses and a 5.4% increase in unit costs. Fuel costs rose 63% or $304 million. For the full year, Delta said its fuel expenses will top last year's levels by nearly $1 billion. Maintenance materials and outside aircraft repairs increased 22% mainly due to higher volumes from the return of grounded capacity and the start of heavy maintenance repairs on regional aircraft.

Delta ended the quarter with $1.45 billion in unrestricted cash, but that level may drop to a "precariously low" $1.1 billion by yearend, predicts JP Morgan analyst Jamie Baker. Even with the proceeds from the sale of eight MD-11s, Delta's holding in Orbitz, and concessions from pilots, the carrier's cash could fall even lower early next year. As a result, Baker believes bankruptcy is inevitable.

If oil prices were to stay at current levels of $50 per barrel the airline estimated its liquidity needs would jump by an additional $600 million in 2005 and by $900 million more in 2006. Delta has no hedges in place that could protect it from high fuel prices. -SL

 

[climbhappy]

ya'll better be careful, the general ( aka der furher) is sleeping and when he wakes , he's gonna find out your starting rumors again. he'a already warned two on here ( sleepy and what's his name) to not do it again.

 

[~~~^~~~]

Monday is too late - This should have been done earlier

The pilots union said there are still significant issues to resolve.

For the first nine months of the year, Delta said its net loss was $3.01 billion, or $24.06 a share, compared to a loss of $458 million, or $3.71 a share, in the year-ago period. Nine-month revenue was $11.36 billion, an 8.4 percent increase from the $10.48 billion recorded in 2003.

In the first nine months of the year, AMR lost $374 million, or $2.33 per share, compared with $1.12 billion or $7.08 per share, in the same period last year. Revenue rose 8.1 percent to $14.10 billion from $13.05 billion. For the first nine months, Northwest lost $458 million, or $5.31 a share, up from a loss of $127 million, or $1.48 a share, a year earlier. Nine-month revenues increased nearly 14 percent to $8.53 billion, from $7.49 billion.

~~~^~~~

 

[sleepy]

Ok, so my prediction was a week early. Sorry General, but my sources tell me that it was set to happen last week as I predicted, but then your MEC started to really "get with the program" and dig a little deeper with the work-rule changes. That lead DAL management to hold off on the filing. But now with the continued loses, the unwillingness of bond holders to make a deal, and the high price of oil, DAL has no choice but to go into CH 11 in the next few days. A deal with ALPA doesn't matter now, it cannot save the sinking ship.

But, on a brighter note, I got an e-mail from DAL assuring me that my SkyMiles are safe (if only I could ever find a flight that wasn't blacked-out to use them).

 

[lostplnetairman]

Well, you do have a point there. I don't know the specifics, as mentioned above just something I heard. I do know that here at ASA, they simply took the entire option to invest in Delta stock outright away from our 401K fund options a few weeks back, not that anyone would want to at this point.

The Sarbanes Oxley Act now requires them to do that along with their obligations as fiduciaries of the 401(k) under ERISA. When the company ratings fall below a certain level, the fiduciaries have to decide whether or not to continue that option. If they choose to continue it and the company tanks, they could be held liable. It's the same as with mutual funds. If they offer investment in a fund that is not doing well, has changed managers five times in the last year and is being investigated for fraud and don't withdraw that from your investment options, they could be held liable. Quite frankly, no employer should be offering the option to invest in their own stock in the 401(k). It's putting all your eggs in one basket!

HR Diva

 

[Heavy Set]

At least the title of this post is an improvement... It's not as "definite" as previous posts that proved WRONG...

Wouldn't surprise me if DAL declared soon - it could use the bankruptcy as a tool to deal with its gargantuan debt burden. I say declare now so that you can negotiate a reduction in that burden and then rebuild. The mainline pilots will take their 30-35% paycut anyway - might as well fix the debt problem (and probably pension liability) too and then move on...

Delta needs a constructive way to deal with $20 BILLION in debt and bankruptcy/restructuring will certainly help renegotiate a healthy portion of that huge debt load...

 

[FDJ2]

Unfortunately Wallstreet didn't read this thread today and get the expert analysis only available at flightinfo. In late day trading DAL stock went up over 8% with an over 50% increase in volume. If only those institutional traders had logged onto flightinfo they would realize that DAL was going to file this weekend.

 

[DDpaysoff]

A 400,000 share block buy 5 minutes before close. Somethings up.

 

[dtfl]

Unfortunately Wallstreet didn't read this thread today and get the expert analysis only available at flightinfo. In late day trading DAL stock went up over 8% with an over 50% increase in volume. If only those institutional traders had logged onto flightinfo they would realize that DAL was going to file this weekend.

Dang - you are correct. What IS up?

As far as ASA and their 401k - the company that controls the Delta 401k did the same a month ago - I spoke with Fideilty last week and they informed me they were selling all preferred stock asap. The common stock would be addressed later - the company did not want to sell all shareholder's common stock at once.

Ch 11 happens on Sundays - so says my parents financial advisors and from past history we see that. So..either the MEC agrees or the company files. Hell.
Either way I really think Delta will recover. Just depends on how and how painful...but IMO I will go back in a heartbeat.

 

[iaflyer]

Delta Air Lines Prepares Chapter 11 Filing

Washington post article today: says it could happen some time next week.

iaflyer

 

[~~~^~~~]

A 400,000 share block buy 5 minutes before close. Somethings up.

Covering short calls?

For those not in the know, shorting a stock works by borrowing the stock from a broker and selling it. The hope is that the stock goes down in value so that when you return the borrowed stock it is worth less than you borrowed it for. The difference is a profit for the participant.

But you can see how th person who "borrowed" the stock owes a stock to his broker. Several things can happen that can cause the broker to call the stock back in. If a lot of investors (brokerages) that the shorts are borrowing from suddenly sell, causing a wave of shares to be "called" back in.

That forces folks to buy shares back, so they can return them to the broker, who wants to unload them.

Delta stock is at the scary bottom of the market where the odds are about the same as a night in Vegas. You can put to rest your theories about huge insider trading activity. Nobody with that kind of money ( or market savy ) plays down here and with Spitzer indicting everybody - even a fool would not be so obvious.

The textbook explanation as not as sexy as mystery investors buying on inside news, but it is much more likely to be true.

My fantasy---I would LOVE to see the stock return to $25 to $40 levels and bury the folks that shorted it, but it is unlikely to happen.