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Delta warns pilots of cash stockpile drop
Fri Aug 19, 2005 09:50 PM ET
By Deena Beasley
LOS ANGELES, Aug 19 (Reuters) - Delta Air Lines Inc. (DAL.N: Quote, Profile, Research) warned pilots on Friday that its cash stockpile had dropped below a key level that could allow it to seek more concessions from the pilots' union, a company spokesman said.
"This is not a surprise action. We have given the Air Line Pilots Association a heads up to let them know that Delta's financial situation has fallen short of earlier assumptions," company spokesman Andy McDill said.
Delta pilots last November ratified a concession package aimed at saving the carrier $1 billion a year, in a move crafted to buy time for the company to restructure outside of bankruptcy.
As part of that plan Delta agreed not to seek further concessions while cash remained above a certain level. It was required to inform the pilots union if the cash stockpile fell below that level, and it sent a memo to pilots on Friday following the drop.
On its web site, the pilot's union said the letter from Delta was "nothing more, nothing less" than a notice that the company's liquidity has fallen below the threshold liquidity level.
The company reported last month that it had $1.7 billion in unrestricted cash and short-term investments as of the end of June. The threshold level was not disclosed.
Delta has lost almost $10 billion since 2001, as it has struggled with a multi-year travel slump triggered by the Sept. 11, 2001 attacks on New York and Washington, D.C., and now high oil prices and competition from low-cost carriers. Capt. John Malone, chairman of Delta's ALPA union group, said in the web posting that the labor contract remains unchanged for now.
Fri Aug 19, 2005 09:50 PM ET
By Deena Beasley
LOS ANGELES, Aug 19 (Reuters) - Delta Air Lines Inc. (DAL.N: Quote, Profile, Research) warned pilots on Friday that its cash stockpile had dropped below a key level that could allow it to seek more concessions from the pilots' union, a company spokesman said.
"This is not a surprise action. We have given the Air Line Pilots Association a heads up to let them know that Delta's financial situation has fallen short of earlier assumptions," company spokesman Andy McDill said.
Delta pilots last November ratified a concession package aimed at saving the carrier $1 billion a year, in a move crafted to buy time for the company to restructure outside of bankruptcy.
As part of that plan Delta agreed not to seek further concessions while cash remained above a certain level. It was required to inform the pilots union if the cash stockpile fell below that level, and it sent a memo to pilots on Friday following the drop.
On its web site, the pilot's union said the letter from Delta was "nothing more, nothing less" than a notice that the company's liquidity has fallen below the threshold liquidity level.
The company reported last month that it had $1.7 billion in unrestricted cash and short-term investments as of the end of June. The threshold level was not disclosed.
Delta has lost almost $10 billion since 2001, as it has struggled with a multi-year travel slump triggered by the Sept. 11, 2001 attacks on New York and Washington, D.C., and now high oil prices and competition from low-cost carriers. Capt. John Malone, chairman of Delta's ALPA union group, said in the web posting that the labor contract remains unchanged for now.
