Delta to exit bankruptcy next week

Associated Press ^ | April 26, 2007 | Vinee Tong

[Zakeet]

Delta Air Lines is exiting bankruptcy and re-entering an increasingly competitive market in which its success depends on operating with a lean labor force and expanding its international flights.

The newly restructured airline was under Chapter 11 protection for almost two years and cut 6,000 jobs and $3 billion in annual costs. On Wednesday, it received approval from U.S. Bankruptcy Judge Adlai Hardin to emerge from bankruptcy as an independent company.

Delta, the nation's third-largest airline, estimates it will be worth $9.4 billion to $12 billion.

More than 95 percent of creditors voted to endorse the plan for Delta to leave bankruptcy as a stand alone carrier. That plan had been put in jeopardy by a $9.8 billion hostile takeover bid launched last fall by Tempe, Ariz.-based US Airways Group Inc. Delta successfully persuaded creditors to back its blueprint to emerge from bankruptcy and reject the buyout offer.

Airline industry analyst Robert Mann said Delta was not likely to try to combine with another carrier in the near term. Industry watchers have speculated that Delta might join with Northwest Airlines Corp., which filed for bankruptcy the same day Delta did.

[Zakeet]

Gerald Grinstein, CEO of Delta Air Lines, right, listens as Ed Bastian, CFO of Delta, speaks to the media after exiting bankruptcy court in New York, Wednesday, April 25, 2007.

[R.W.Ratikal]

To stay out of bankruptcy will be the trick. An important move will be to shift Delta’s huge pension liabilities onto the backs of taxpayers through the Pension Protection Act.

Delta must also stay away from the lure of cheap Airbus airplanes and learn to compete in the modern air market.

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[G-Man 1]

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