Delta Air May File Bankruptcy Wed or Thurs?

[storminpilot]

http://biz.yahoo.com/rb/041023/airlines_delta_bankruptcy_1.html



Reuters
Delta Air May File Bankruptcy Soon-Report
Saturday October 23, 1:42 am ET

WASHINGTON (Reuters) - Delta Air Lines Inc. (NYSE:DAL - News) could file for Chapter 11 bankruptcy protection as soon as next week, the Washington Post reported in its Saturday edition, citing an unnamed source familiar with the situation.

The troubled airline could file as early as Wednesday or Thursday, according to the article on the newspaper's web site. But a filing could be delayed if the airline is able to obtain $1 billion in pay and benefit cuts it has sought from its pilots.

A company spokeswoman told Reuters that the company plans to do whatever it can to avoid filing for bankruptcy protection.

"Given Delta's financial situation, there is no question that we are in a race against time, but we are doing every thing possible to do what we can outside of bankruptcy," Delta spokeswoman Patsy Mulcahy told Reuters.

Still, even if pilots agree on the concessions, a Chapter 11 is likely, the Post wrote.

Earlier this week, the troubled carrier reported a third quarter net loss of $646 million, or $5.16 a share. The four hurricanes that struck the U.S. crippled a significant portion of Delta's southeastern operations during the quarter, resulting in an estimated revenue loss of about $50 million.

In addition, operating expenses for the September 2004 quarter increased 14.9 percent from the same period a year ago, primarily because of a 63.1 percent hike in fuel costs, the company said.

Delta's bankruptcy filing would mark it as the third U.S. carrier operating under Chapter 11 at the same time. That hasn't happened among the top 10 domestic airlines since 1992, the Post wrote.

 

[G4G5]

Nidel stated in last weeks USAtoday that he felt they still had a month left, which would indicated that they are trying to hold out until after the elections. It's sad to say it but it's not a matter of If anymore. This was quite clear after the cover of last Wed's WSJ state CH11 "imminent".

Just MHO, but at this point concessions by the pilots only led to lowering the bar for future CH11 negotiations. At this point conceesions by any DAL labor group are a moot point.

Good luck

 

[Networ-King]

Nidel stated in last weeks USAtoday that he felt they still had a month left, which would indicated that they are trying to hold out until after the elections. It's sad to say it but it's not a matter of If anymore. This was quite clear after the cover of last Wed's WSJ state CH11 "imminent".

Just MHO, but at this point concessions by the pilots only led to lowering the bar for future CH11 negotiations. At this point conceesions by any DAL labor group are a moot point.

Good luck

Don't even worry about that..... since DALPA gave Delta another package a week and one day ago, management has said nothing about it. It would be near impossible to get a TA out and have a member ratification in this short of time. I didn't say totaly impossible, but I think we all know where this is going. And I'd rather the pilots take the pay cut in Chapt 11 ONLY instead of the United deal, where they take a pay cut and then take another one in Chapt 11
and another and another .........

are we all having fun yet?

 

[T-Gates]

Does anyone think DAL may be rushing CH11 so they don't get saddled with the DoJets? That would then give them to the competition (flyI) and saddle them with a large debt burden, possibly making Independence Air's financial situation more precarious.....

Just a thought, any insight?

 

[garf12]

if they do go under will their flights stop? I have a flight to on them to Amsterdam in 3 weeks!

 

[T-Gates]

DAL filing CH11 will not cause all flights to cease.... UAL has been operating under CH11 for 2 years now.

 

[FDJ2]

DAL seems to need the $1B pilot concession this week, but yet DAL doesn't seem to need the $1B non contract employee (82% of DAL employees have no contract) until 2005. I guess $$$ from your unionized workforce are more green than from your predominantly non unionized workforce.

Regardless, pilot concessions won't help a liquidity crisis brought on by incompetent management. If DAL is going BK it will go BK with or without pilot concessions. Pilot concessions should only be negotiated as part of an overall restructuring which includes debt holders and other stakeholders.

Here's a prediction, which is nothing more than a guess. DALPA will negotiate a TA with DAL shortly, it will have pay cuts which will bring us in line with NWA, approximately 25-30%. The cap will go up to between 82-85 hours. DAL will announce $1b in financing has been arranged and some of DAL's debt will be restructured. Upside protections will be in line with those achieved by NWA pilots.

 

[No Delay]

Delta could file BK soon.....if I had a nickel everytime I have heard that.


Just do it already!

 

[737 Pylt]

somewhere a village is missing their idiot

Delta could file BK soon.....if I had a nickel everytime I have heard that.


Just do it already!

I see by all your flight time and experience you have voiced a well thought out response. Maybe if you had 20+ years invested in a company you would shut your pie hole and THINK before responding. When you make reckless remarks like that you only entice people, who make their livings at that particular company, mad! Hence, try to use your brain for something other than a holder for your hat!
737
fed up with people wishing bad on others' careers!

 

[SWA/FO]

easy there pylt... anybody ever show you how to spell "pilot" in your 20 year career? How many hours you got, huh? My Dad can beat your Dad up.

 

[No Delay]

Hey 737 pylt, I am very much invested in this industry. I happen to fly for ASA so whatever happens to Delta very much affects me. Now, sure I don't have 20 years but it will affect my family all the same. So maybe you need to shut your pie hole!

The only point I was making was that everyone knows it is coming...lets just do it and move on. So maybe you need to shut your pie hole!

Actually, I think BK could be a good thing. We are trying to compete in an industry where half the majors have filed BK. Sure, it creates other problems but I would like to get some of this debt off of us and move on to making this airline profitable.

 

[metroplex]

I do not wish anybody bad luck and I never hope someone will loose his job, but if you have "invested " 20 yrs or more at an major airline , cashing in hundreds and thousands of dollars, and yes, you major guys had it great there for many, many years you shoud have maybe invested , just in case bad times show up. If you have not , you are an idiot and stop your crying.

 

[~~~^~~~]

737Plt:

Here's what killing your airline.

DAL seems to need the $1B pilot concession this week, but yet DAL doesn't seem to need the $1B non contract employee (82% of DAL employees have no contract) until 2005. I guess $$$ from your unionized workforce are more green than from your predominantly non unionized workforce.

What you arrogant fools do not seem to realize is that the pilots are the only employees that would not be making the same, or more, money without Delta. Other employee groups are paid in line with their market value to other employers. The pilots are not. Heck, I make twice the income from my part time gig than I do flying for ASA. If ASA were to go away, I would earn more.

Further, the gap is so huge that yes, wages cuts on the mainline pilot level are much more GREEN than cuts anywhere else. One of the Comair pilots ran the numbers and if Comair pilots were to take a 25% pay cut, the saving would add up to around 1% of the 1Billion Delta is looking for.

My family has endured airline bankruptcies and I know what it is like to watch the savings dwindle to make the house payment. You guys just do not understand reality. Unfortunately for both of us, it is catching up to you and you will learn.

The Delta MEC will go down in history beside McNamara, Charlie Bryan and Frank Lorenzo. Enjoy it while it lasts, these days are getting very short.

~~~^~~~

 

[KingAirKiddo]

I see by all your flight time and experience you have voiced a well thought out response. Maybe if you had 20+ years invested in a company you would shut your pie hole and THINK before responding. When you make reckless remarks like that you only entice people, who make their livings at that particular company, mad! Hence, try to use your brain for something other than a holder for your hat!
737
fed up with people wishing bad on others' careers!

Venting, Venting, Vented!!!

I think that he was saying (poorly) is that the window of opportunity for a restructuring outside of BK protection has passed. It is crucial that the cash bleed be stopped very quickly if the company is to remain viable moving forward, and the only way to accomplish that now that there is virtually no liquidity is to file Chapter 11. It is simply a mathematical certainty at this point, in my humble opinion.

However, I understand why this is an emotional issue for you (as it is for us at CMR and ASA--even if you do think we are the devil ) and wish you the best in whatever happens in the coming weeks and months.

 

[KingAirKiddo]

I see by all your flight time and experience you have voiced a well thought out response. Maybe if you had 20+ years invested in a company you would shut your pie hole and THINK before responding. When you make reckless remarks like that you only entice people, who make their livings at that particular company, mad! Hence, try to use your brain for something other than a holder for your hat!
737
fed up with people wishing bad on others' careers!

Venting, Venting, Vented!!!

I think that he was saying (poorly) is that the window of opportunity for a restructuring outside of BK protection has passed. It is crucial that the cash bleed be stopped very quickly if the company is to remain viable moving forward, and the only way to accomplish that now that there is virtually no liquidity is to file Chapter 11. It is simply a mathematical certainty at this point, in my humble opinion.

However, I understand why this is an emotional issue for you (as it is for us at CMR and ASA--even if you do think we are the devil ) and wish you the best in whatever happens in the coming weeks and months.

 

[DL_Infidel]

737Plt:

Here's what killing your airline.


What you arrogant fools do not seem to realize is that the pilots are the only employees that would not be making the same, or more, money without Delta. Other employee groups are paid in line with their market value to other employers. The pilots are not. Heck, I make twice the income from my part time gig than I do flying for ASA. If ASA were to go away, I would earn more.

Further, the gap is so huge that yes, wages cuts on the mainline pilot level are much more GREEN than cuts anywhere else. One of the Comair pilots ran the numbers and if Comair pilots were to take a 25% pay cut, the saving would add up to around 1% of the 1Billion Delta is looking for.

My family has endured airline bankruptcies and I know what it is like to watch the savings dwindle to make the house payment. You guys just do not understand reality. Unfortunately for both of us, it is catching up to you and you will learn.

The Delta MEC will go down in history beside McNamara, Charlie Bryan and Frank Lorenzo. Enjoy it while it lasts, these days are getting very short.

~~~^~~~

"...you arrogant fools...you guys just do not understand reality...it is catching up to you and you will learn." Are you speaking of the whole pilot group? Be specific. It appears that you do wish ill upon another pilot group...that's too bad.

As far as the DMEC goes, they're doing what we elected them to do. To put them in the same company as you have above is nonsensical.

BTW, none of us are enjoying this....this is where mismanagement has taken us.

 

[FDJ2]

What you arrogant fools do not seem to realize is that the pilots are the only employees that would not be making the same, or more, money without Delta. Other employee groups are paid in line with their market value to other employers. The pilots are not. Heck, I make twice the income from my part time gig than I do flying for ASA. If ASA were to go away, I would earn more.

Further, the gap is so huge that yes, wages cuts on the mainline pilot level are much more GREEN than cuts anywhere else. ~~^~~~

Fins are you really that stupid? A bilion is a billion. Period. DAL will take a billion dollars out of the non contract employees in 2005, do you expect us to believe that their wages and benefits will be in line with their market value in 2005, after the cuts, but had the cuts happened in 2004 they would have been below their market value? YGTBSM. That billion is just as green as the pilot billion and should have been taken a while ago. What you seem too ignorant to understand is that pilot wage cuts alone will not turn this company around. All stake holders have to contribute, otherwise it is futile. If GG can't get the other stake holders to come along for the ride, then CH11 is inevitable regardless of what the pilots do. If we do have to go into Ch11 because of managements failed policy, we will all have to take a cut, including you Fins.

 

[MedFlyer]

That billion is just as green as the pilot billion and should have been taken a while ago.

Let's translate this phrase into what you really are saying....the other employee groups should have taken a paycut a year ago in order to allow you to have more time with your industry leading pay and so that you wouldn't have to take as big of a paycut. Taking those cuts a year ago wouldn't have changed anything for DL except allow the pilots to keep their pay a little longer and push off bankruptcy a few month.

With that translation out of the way, why should DL have taken cuts from the other groups when the least productive employee group on the property is the pilots? Shouldn't cuts come from the least productive first? Or is your management style such that you believe that the least productive should be rewarded and the most productive penalized?

 

[FDJ2]

Medflyer, you can spin my words into whatever translation seems to give you the most comfort/joy/anger/outrage choose your emotion, but if a company is in a precarious financial condition then it should save money where it can when it can and not squander it just to create a crisis. Certainly DAL would be in a better financial condition today if management would not have sold our fuel hedge, have implemented their non contract employee cuts this year instead of waiting for next year and not have poured over $350M voluntarily into the non contract employee pension fund when no contributions were required. Those management decisions have cost DAL approximately $2B this year alone. I'm not even going to get into mortaging DAL's future on high cost RJs in this LCC environment. If you think for one second that slashing pilot costs alone will solve DAL's financial problems and that DAL does not also have to get savings from the 82% of employees who are non contract at will workers, then you are about as ignorant and foolish as Fins. Long term our contracts with our DCI carriers will also have to be adjusted and that includes CMR/ASA. This will ultimately lead to less $$$ for our DCI partners and create your own little financial crisis. I'm sure you will be willing to gut your contract and get inline with MESA and CHQ when its inevitably your turn to give up some $$$ and work rules.

 

[~~~^~~~]

FDJ2:

Just answer one question.

Without Delta, are you better off?

I don't wish bad things for your pilot group. After all 82% of my passengers get off my airplane and on to yours. Without your operation there is no market at all for my operation.

Your MEC has failed to lead. They lack the guts to do anything that is not politically popular with their constituency, even if it means they have wasted so many opportunities to keep Delta and your job, alive.

Rather than make the tough choices, your MEC has consistently defaulted into pandering to the arrogance and greed of the Delta pilots. First, the Connection pilots were not good enough to be on the list, even the bottom. So they pandered to the belief that Connection pilots were inferior to rally support and took Connection down from 105 seats to 50 ( creating a 50 to 148 seat gap Delta can not economically fill ).

Then they held up Delta for Contract 2000, even though any fool could see there was not the money there to pay for it. The Delta MEC took every penny of profit Delta made during a boom year and turned into $200,000+ compensation packages for First Officers. A Captain I deadheaded with said his W2 was $340,000+.

This took any money Delta could have used for new equipment and pi$$ed it away. The 777 options, the 737-800 orders, there just was not money for these expenditures.

And then, furloughs. The scope that the MEC sold the Delta pilots wasn't job protection after all. Even the Delta MEC realized that sizing down connection ( the ratio limit would have caused furloughs at Connection ) would have had a negative effect on mainline and your MEC relented. None the less, Delta pilots remained on the street. Efforts by the RJDC to start trilateral talks between Comair, ASA, and Delta were blocked by the Delta MEC.

And today, your MEC continues to fail you ( and the rest of us are along for the ride ). Delta is going into bankruptcy, despite ALPA's own knowledge that this was going to be the result unless C2K compensation was brought in line with reality. Your MEC's inaction, prejudice and arrogance will cost you your job. With every day it becomes more an issue of "when," not "if." If you look at the numbers objectively, you know I am right.

And ALPA was not the only party with this information. As you may recall, on the predecessor to this board I called Delta's bankruptcy ( as Proflig8tor ). This was shortly after the C2K TA was announced. I hate being right on such terrible news. But as my crystal ball begins to clear up, I'm not seeing a future with Delta in it.

I truly wish you and your family the best. Like I said, we have been there. My father went from a 747 CA to a gas station attendant at a Citgo when Flying Tigers went T.U. I remember those days....

~~~^~~~

P.S. First: It takes credit to have a fuel hedge. Delta did not have the credit necessary to finance the hedge, they had absolutely no choice.

Second: ASA is in line with CHQ. Remember we won the RFP airplanes because our costs were lower than CMR and CHQ got the rest of the airplanes. We were also asked to take the MCO operation from CHQ and turned it down.

Third: You can cut my earnings by 25%. It does not make much a difference, based on last year's W2 it would be $11,800. Enough money to buy the fuel to do a ATL-DFW round trip with an RJ. Now if you take 25% of one of those $200,000 First Officers you get four times as much.

But, if you cut my wages by 25% I'll use up my sick time, then quit ( or vote for a strike ), and do my other job which netted me several 1099's totalling more than six figures. I will be better off and enjoy flying my Beechcraft around.

It really is your call, since your MEC is negotiating my wages and working conditions without my representation. Hate to see Delta disappear, but at the end of the day, it will not matter to my family. In the mean time I will continue to enjoy the work I do for ASA which makes Delta a profit of around 11% and sometimes as much as 24%. Seeing as how mainline only breaks even with a 89% load factor, you can't make that claim either.

Perhaps a little humility is in order.