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Delta Air Lines Prepares Chapter 11 Filing

Delta Air Lines Prepares Chapter 11 Filing

Old Oct 23rd 2004, 2:56 pm
  #1  
N E W S
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Default Delta Air Lines Prepares Chapter 11 Filing

Delta Air Lines Prepares Chapter 11 Filing

By Keith L. Alexander
Washington Post Staff Writer
Saturday, October 23, 2004; Page E01

Delta Air Lines Inc. could file for Chapter 11 bankruptcy protection
as soon as next week, a source familiar with the matter said
yesterday.

Executives of the nation's third-largest airline spent the week
meeting with lawyers and bankruptcy consultants.

Delta could file as early as Wednesday or Thursday, the source said.
But the filing could be delayed if the airline is able to obtain $1
billion in pay and benefit cuts it has sought from pilots, the
carrier's only unionized work group. Contract negotiations are to take
place this weekend.

Even if the pilots agree on the concessions, a Chapter 11 filing is
likely. "It's a crapshoot. A decision by the pilots could postpone it
or we may go ahead and do it. It's that close," the source said.

Delta executives sent a message this week to the company's top
frequent fliers, assuring them that even if the airline filed for
Chapter 11 protection, tickets would be honored and its frequent-flier
program would be unaffected.

Delta spokesman Anthony Black declined to comment on a Chapter 11
filing. He said the airline is working with its pilots and debt
holders in an effort to reduce costs and avoid Chapter 11. "We're in a
race against time," Black said.

Delta's filing would mean that three major U.S. airlines would be
operating under Chapter 11 protection at the same time. That hasn't
happened among the top 10 domestic airlines since 1992, when
Continental, Trans World Airlines and America West were all operating
under Chapter 11.

Arlington-based US Airways, the nation's No. 7 carrier in terms of
revenue, filed for Chapter 11 protection last month for the second
time in two years. United Airlines, the nation's second-largest
carrier, has been operating under a court restructuring for nearly two
years.

Yesterday, United agreed to hire Bridge Associates, an outside
consultant to evaluate its business plan. The decision was reached as
part of an agreement with United's mechanics and flight attendants,
who had filed objections over the airline's reorganization plan with
the bankruptcy court.

Traditional hub-and-spoke airlines such as Delta, United and US
Airways will continue to struggle until they drastically cut their
costs and flights, said airline analyst Ray Neidl of Calyon
Securities. He said the industry continues to suffer from excess
capacity, which has been exacerbated by the growth of low-cost
carriers.

The traditional carriers are facing further difficulties in the
traditionally weak travel seasons of the fourth and first quarters.
Record high fuel prices also are weighing on the industry, as fuel is
an airline's second-biggest cost after labor.

Even some low-cost, low-fare airlines are struggling. Dulles-based
Independence Air, which launched this summer, filled less than half of
its 50-seat regional jets in August and September. A report by airline
analyst Robert N. Ashcroft of UBS Investment Research this week said
the airline could face a Chapter 11 filing by January.

"There's too much competition," Neidl said. "The increased competition
keeps the fares at record low levels, but the increased fuel prices
are keeping the costs high."

Delta lost $646 million in the third quarter, sharply widening its
loss of $164 million in the same period a year ago. It has racked up
more than $6 billion in losses since 2001.

The airline ended the quarter with $1.45 billion in cash, about $550
million less than in the second quarter.

Delta shares closed Friday at $3.24, up 22 cents, or 7.28 percent.
Before the Sept. 11, 2001, terrorist attacks, Delta shares were
trading at around $41.

In a recorded telephone message to Delta pilots this week, Delta pilot
spokesman Chris Renkel said union negotiators are scheduled to meet in
Herndon on Monday for a briefing after the weekend talks.

"Your union leadership fully recognizes Delta's precarious financial
situation. Much work has been done to date, but many issues remain
unresolved," Renkel said.

Other airlines continue to report mounting losses. AMR Corp., the
parent of American Airlines, the world's largest airline, reported
this week a third-quarter loss of $214 million, compared with a profit
of $1 million in the comparable quarter last year. The airline also
warned its fourth-quarter loss would be "significantly wider" than the
third quarter's because of continued high fuel prices in the typically
weak winter season. AMR executives said the airline would launch a new
round of efforts to cut costs and boost revenue, including furloughing
up to 1,100 workers, reducing its fleet and trimming its domestic seat
capacity by 5 percent starting in the first quarter. American also
said it was adding seats to its planes, in effect eliminating its
highly marketed "More Room Throughout Coach" campaign.

http://www.washingtonpost.com/wp-dyn...av=rss_topnews
 
Old Oct 24th 2004, 5:30 pm
  #2  
Sylvia Else
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Default Re: Delta Air Lines Prepares Chapter 11 Filing

n e w s wrote:

    > Delta Air Lines Inc. could file for Chapter 11 bankruptcy protection
    > as soon as next week, a source familiar with the matter said
    > yesterday.

This is a great shame. Delta's flying record is second to none. Although
it's had a fatal accident or two, when number of flights are taken into
account it could well be the world's safest airline.

Sylvia.
 
Old Oct 26th 2004, 5:08 am
  #3  
Frank F. Matthews
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Default Re: Delta Air Lines May Drop Preparation For Chapter 11 Filing

Then again, if the pilots buy in, they have 600 million in financing and
will not go 11. Interesting that 500 ,million is prepayment for
frequent flyer miles. That indicates that AE expects them to stay
around but seats will be really hard to find. I wonder if the agreement
includes increased seat availability for FF tickets?

Sylvia Else wrote:

    > n e w s wrote:
    >> Delta Air Lines Inc. could file for Chapter 11 bankruptcy protection
    >> as soon as next week, a source familiar with the matter said
    >> yesterday.

    > This is a great shame. Delta's flying record is second to none. Although
    > it's had a fatal accident or two, when number of flights are taken into
    > account it could well be the world's safest airline.
    > Sylvia.
 
Old Oct 26th 2004, 5:54 am
  #4  
Ron Natalie
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Default Re: Delta Air Lines May Drop Preparation For Chapter 11 Filing

=
    >
    >> This is a great shame. Delta's flying record is second to none.
    >> Although it's had a fatal accident or two, when number of flights are
    >> taken into account it could well be the world's safest airline.
    >> Sylvia.
    >
    >

According to AirSafe.com, Delta is second only to the half dozen
US carriers that have had no fatal accidents.
 
Old Oct 26th 2004, 10:51 am
  #5  
Sylvia Else
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Default Re: Delta Air Lines May Drop Preparation For Chapter 11 Filing

Ron Natalie wrote:

    > =
    >
    >>> This is a great shame. Delta's flying record is second to none.
    >>> Although it's had a fatal accident or two, when number of flights are
    >>> taken into account it could well be the world's safest airline.
    >>> Sylvia.
    >
    > According to AirSafe.com, Delta is second only to the half dozen
    > US carriers that have had no fatal accidents.

However, if you look at the number of flights flown by Delta, and then
look at the average number of flights per accident, you'll find that the
other carriers have not flown enough sectors for it to be likely for
them to have had an accident even if their true accident rate is
significantly higher than Delta's.

Now, it is possible that Delta's financial state has compromised its
safety - only insiders would really be able to have a view on that. It
is also possible that some of the accident free carriers really are
safer than Delta ever was. The latter is impossible to determine.

But on the available information, I'd still fly Delta given a choice.

Sylvia.
 
Old Oct 27th 2004, 12:10 am
  #6  
Ron Natalie
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Default Re: Delta Air Lines May Drop Preparation For Chapter 11 Filing

Sylvia Else wrote:

    >
    > However, if you look at the number of flights flown by Delta, and then
    > look at the average number of flights per accident, you'll find that the
    > other carriers have not flown enough sectors for it to be likely for
    > them to have had an accident even if their true accident rate is
    > significantly higher than Delta's


No argument there. With the exception of Southwest, they were all
fairly low time airlines.
 
Old Oct 27th 2004, 2:13 pm
  #7  
Running With Scissors
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Default Re: Delta Air Lines May Drop Preparation For Chapter 11 Filing

Sylvia Else <[email protected]> wrote in message news:<[email protected]. au>...
    > Ron Natalie wrote:
    >
    > > =
    > >
    > >>
    > >>> This is a great shame. Delta's flying record is second to none.
    > >>> Although it's had a fatal accident or two, when number of flights are
    > >>> taken into account it could well be the world's safest airline.
    > >>> Sylvia.
    > >>
    > >>
    > >>
    > >
    > > According to AirSafe.com, Delta is second only to the half dozen
    > > US carriers that have had no fatal accidents.
    >
    > However, if you look at the number of flights flown by Delta, and then
    > look at the average number of flights per accident, you'll find that the
    > other carriers have not flown enough sectors for it to be likely for
    > them to have had an accident even if their true accident rate is
    > significantly higher than Delta's.
    >
    > Now, it is possible that Delta's financial state has compromised its
    > safety - only insiders would really be able to have a view on that. It
    > is also possible that some of the accident free carriers really are
    > safer than Delta ever was. The latter is impossible to determine.
    >
    > But on the available information, I'd still fly Delta given a choice.
    >
    > Sylvia.

so you are saying then, by your interpretation, is that an airline
*not delta* that has had an accident, hasnt had an accident as they
havnt flown enough sectors to qualify for an accident ? and that delat
having flown a significant number of sectors, by your ruling is that
it has the flight sector numbers flown to qualify for an accident no
matter what its safety record is !

Delta's financial status has had no influence on its safety,
furthermore, their historical records on equipment is excellent.

what is impossible to determine is if are you ****ing insane or just
pulling this shit out of your ass?
 
Old Oct 27th 2004, 2:18 pm
  #8  
Rich Ahrens
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Default Re: Delta Air Lines May Drop Preparation For Chapter 11 Filing

Sylvia Else wrote:
    > But on the available information, I'd still fly Delta given a choice.

On their extensive Australian route structure, no doubt...
 
Old Oct 27th 2004, 4:06 pm
  #9  
Sylvia Else
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Default Re: Delta Air Lines May Drop Preparation For Chapter 11 Filing

running with scissors wrote:

    > Sylvia Else <[email protected]> wrote in message news:<[email protected]. au>...
    >
    >>Ron Natalie wrote:
    >>>=
    >>>>>This is a great shame. Delta's flying record is second to none.
    >>>>>Although it's had a fatal accident or two, when number of flights are
    >>>>>taken into account it could well be the world's safest airline.
    >>>>>Sylvia.
    >>>According to AirSafe.com, Delta is second only to the half dozen
    >>>US carriers that have had no fatal accidents.
    >>However, if you look at the number of flights flown by Delta, and then
    >>look at the average number of flights per accident, you'll find that the
    >>other carriers have not flown enough sectors for it to be likely for
    >>them to have had an accident even if their true accident rate is
    >>significantly higher than Delta's.
    >>Now, it is possible that Delta's financial state has compromised its
    >>safety - only insiders would really be able to have a view on that. It
    >>is also possible that some of the accident free carriers really are
    >>safer than Delta ever was. The latter is impossible to determine.
    >>But on the available information, I'd still fly Delta given a choice.
    >>Sylvia.
    >
    >
    > so you are saying then, by your interpretation, is that an airline
    > *not delta* that has had an accident, hasnt had an accident as they
    > havnt flown enough sectors to qualify for an accident ? and that delat
    > having flown a significant number of sectors, by your ruling is that
    > it has the flight sector numbers flown to qualify for an accident no
    > matter what its safety record is !
    >

Essentially it's to do with statistical significance. The question being
asked is "how likely am I to survive a flight with airline X?" Simply
dividing the total number of sectors by the number of crashes only gives
part of the answer. The true (but unknowable) accident rate may differ
from the number calculated. So what you end up with is an accident rate
and a confidence factor for that rate. The more sectors flown, the
greater the confidence that the calculated rate is close to the true rate.

The confidence factor for Delta is quite high. They've flown a lot of
sectors. The confidence factor for the other airlines is a lot lower
because they've not flown so many sectors. The lack of confidence in
their zero accident rates is so low that it's quite probable that their
true accident rate is higher than Delta's true accident rate.

> Delta's financial status has had no influence on its safety,
> furthermore, their historical records on equipment is excellent.

This should be true, but it's also clear that when an airline is in
financial difficulties, there are pressures on all areas to cut costs.
This doesn't necessarily mean they violate the regulations, but if an
airline operates only to the letter of the regulations, then I don't
want to fly on it.
>
> what is impossible to determine is if are you ****ing insane or just
> pulling this shit out of your ass?

Why does it have to be one or the other? Why not both?

Sylvia.
 
Old Oct 27th 2004, 10:41 pm
  #10  
nitram
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Default Re: Delta Air Lines May Drop Preparation For Chapter 11 Filing

On Thu, 28 Oct 2004 14:06:25 +1000, Sylvia Else
<[email protected]> wrote:


    > > what is impossible to determine is if are you ****ing insane or just
    > > pulling this shit out of your ass?
    >Why does it have to be one or the other? Why not both?

Can you do a petomaine act too? :-)
--
Martin
 

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