If this is your first visit, be sure to check out the FAQ by clicking the link above. You may have to register before you can post: click the register link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. |
|
|
|
Thread Tools | Display Modes |
#1
|
|||
|
|||
Delta Plans to File for Bankruptcy
Source: Delta Plans to File for Bankruptcy By HARRY R. WEBER, AP
Business Writer Mon Sep 12,10:50 PM ET Delta Air Lines Inc., the nation's third-largest carrier, plans to file for bankruptcy protection in New York as early as Wednesday, according to an industry consultant who has been informed of the company's plans. Delta's stock tumbled 25 cents, or 22.7 percent, to close at 85 cents in heavy trading Monday on the New York Stock Exchange. The consultant, who was not authorized to disclose the information and thus spoke on condition of anonymity, said Delta is working with GE Commercial Finance and other creditors to arrange roughly $2 billion in debtor-in-possession financing. The money would allow the airline to operate in bankruptcy. Delta, which has lost nearly $10 billion since January 2001, likely will pledge the few remaining assets not already pledged as collateral for loans as part of the bankruptcy financing agreement, the consultant said. "There is nothing unencumbered after this," according to this consultant. The consultant said the filing was expected to come Wednesday afternoon but could be pushed to Thursday depending on when the bankruptcy financing is completed. A Delta spokeswoman declined to comment, saying no decision about bankruptcy has been made. Two spokesmen for GE Commercial Finance also declined to immediately comment. Reached at his Connecticut home Monday, Delta director Edward H. Budd said, "Anything that's going to be talked about at Delta is going to come from Delta." Calls to the homes of four other company directors were not answered. The bankruptcy filing would come as Atlanta-based Delta has been unable to right itself amid persistently high fuel costs and heavy debt and pension obligations. The filing would make Delta the third major U.S. carrier to enter Chapter 11 since the 2001 terrorist attacks, joining Elk Grove Village, Ill.-based UAL Corp., parent of United Airlines, and Arlington, Va.-based US Airways Group, Inc., which has filed twice in the last three years. Some smaller carriers, including Honolulu-based Hawaiian Airlines and Indianapolis-based ATA Airlines Inc., also have filed for bankruptcy in recent years. If it follows the pattern of most big airline bankruptcies, Delta's existing shares would eventually become worthless and portions of the airline's existing debt would be exchanged for equity in a reorganized Delta. One major question is whether Delta would go the route of UAL and US Airways and seek to turn over its pilot and other employee pension plans to the federal government. Delta's total debt is roughly $20.5 billion, and it listed $21.6 billion in assets as of June 30. The asset figure would make Delta's bankruptcy the ninth-largest in U.S. history, according to bankruptcy tracker New Generation Research, Inc. Delta has announced up to 24,000 job cuts over the last four years. In September 2004, it also said it would shed its Dallas hub as part of a sweeping turnaround plan aimed at saving the airline. The plan was hampered, however, by soaring fuel costs. Fort Worth, Texas-based AMR Corp., the parent of American Airlines, the nation's biggest carrier, teetered on the verge of bankruptcy before winning deep concessions from its employees. The other legacy carriers, those with a large presence in multiple regions prior to deregulation in 1978, are Eagan, Minn.-based Northwest Airlines Corp. and Houston-based Continental Airlines Inc. Northwest has also been said to be close to bankruptcy. |
#2
|
|||
|
|||
Alec D. Plotkin wrote: Source: Delta Plans to File for Bankruptcy By HARRY R. WEBER, AP Business Writer Mon Sep 12,10:50 PM ET Delta Air Lines Inc., the nation's third-largest carrier, plans to file for bankruptcy protection in New York as early as Wednesday, according to an industry consultant who has been informed of the company's plans. [snip] If it follows the pattern of most big airline bankruptcies, Delta's existing shares would eventually become worthless and portions of the airline's existing debt would be exchanged for equity in a reorganized Delta. One major question is whether Delta would go the route of UAL and US Airways and seek to turn over its pilot and other employee pension plans to the federal government. [snip] This is going to be a growing problem over the next umpteen years. A big part of this too is the cost of health care. For all the fuss and bother about Social Security, it is the healthcare costs which will be a far bigger problem, far sooner, made all the worse by the fact that the government (through the pension guarantee corp) will be taking over these large pension funds. Northwest has also been said to be close to bankruptcy. And soon, for related reasons, GM, Ford, ..... |
#3
|
|||
|
|||
wrote: Alec D. Plotkin wrote: Source: Delta Plans to File for Bankruptcy By HARRY R. WEBER, AP Business Writer Mon Sep 12,10:50 PM ET Delta Air Lines Inc., the nation's third-largest carrier, plans to file for bankruptcy protection in New York as early as Wednesday, according to an industry consultant who has been informed of the company's plans. [snip] If it follows the pattern of most big airline bankruptcies, Delta's existing shares would eventually become worthless and portions of the airline's existing debt would be exchanged for equity in a reorganized Delta. One major question is whether Delta would go the route of UAL and US Airways and seek to turn over its pilot and other employee pension plans to the federal government. [snip] This is going to be a growing problem over the next umpteen years. A big part of this too is the cost of health care. For all the fuss and bother about Social Security, it is the healthcare costs which will be a far bigger problem, far sooner, made all the worse by the fact that the government (through the pension guarantee corp) will be taking over these large pension funds. Northwest has also been said to be close to bankruptcy. And soon, for related reasons, GM, Ford, ..... That's why some carmakers are opening plants or moving more production to Canada... And it's not just high health care costs that are hobbling the carmakers, the low education levels in the Southern right - to - work states is another factor influencing decisions to move to Canada... -- Best Greg |
#4
|
|||
|
|||
Gregory Morrow wrote: wrote: [snip] If it follows the pattern of most big airline bankruptcies, Delta's existing shares would eventually become worthless and portions of the airline's existing debt would be exchanged for equity in a reorganized Delta. One major question is whether Delta would go the route of UAL and US Airways and seek to turn over its pilot and other employee pension plans to the federal government. [snip] This is going to be a growing problem over the next umpteen years. A big part of this too is the cost of health care. For all the fuss and bother about Social Security, it is the healthcare costs which will be a far bigger problem, far sooner, made all the worse by the fact that the government (through the pension guarantee corp) will be taking over these large pension funds. Northwest has also been said to be close to bankruptcy. And soon, for related reasons, GM, Ford, ..... That's why some carmakers are opening plants or moving more production to Canada... [snip] Which doesn't do diddly for the retired health care costs, which is the real problem. They spend way more on folks that aren't working any longer than they do on the ones still producing cars. |
#5
|
|||
|
|||
"Gregory Morrow" wrote That's why some carmakers are opening plants or moving more production to Canada... And it's not just high health care costs that are hobbling the carmakers, the low education levels in the Southern right - to - work states is another factor influencing decisions to move to Canada... Currently, Toyota is building a major full size truck plant close to San Antonio, NOT ONTARIO, not only right in the heart of one of those Southern right to work states (like those Southern RtW states BMW and DB and several others have chosen) but one where the education level (but not the potential craftsmanship) of the workers-to-be is even lower along with their English language skills. Amazingly. the plant will operate in Spanish rather than English, something new for the US car bidness, and a shock for Michiganers arriving in search of a job. Asd for decisions to move to Canada, about all that's left to be in Canada will be final assembly, since Canada, as with much of the US and even Mexico, has been priced out of much of the "parts" business. I'll suggest that while you've a decent general knowledge of airlines, you're well behind the power curve when it comes to the automobile/truck manufacturing business, for a decade or so busily fleeing to Southern RtW states in the US as fast as contracts will allow, while the parts and components business was evacuating to China and the like. TMO |
#6
|
|||
|
|||
TOliver wrote: "Gregory Morrow" wrote That's why some carmakers are opening plants or moving more production to Canada... And it's not just high health care costs that are hobbling the carmakers, the low education levels in the Southern right - to - work states is another factor influencing decisions to move to Canada... Currently, Toyota is building a major full size truck plant close to San Antonio, NOT ONTARIO, not only right in the heart of one of those Southern right to work states (like those Southern RtW states BMW and DB and several others have chosen) but one where the education level (but not the potential craftsmanship) of the workers-to-be is even lower along with their English language skills. Amazingly. the plant will operate in Spanish rather than English, something new for the US car bidness, and a shock for Michiganers arriving in search of a job. Asd for decisions to move to Canada, about all that's left to be in Canada will be final assembly, since Canada, as with much of the US and even Mexico, has been priced out of much of the "parts" business. You mean Autolite will now have to stop sponsoring of that wierdly spooky _Suspense_ radio show...!? I'll suggest that while you've a decent general knowledge of airlines, you're well behind the power curve when it comes to the automobile/truck manufacturing business, for a decade or so busily fleeing to Southern RtW states in the US as fast as contracts will allow, while the parts and components business was evacuating to China and the like. And here all along I thought that Studebaker - Packard still handled distribution/sales of those imported Mercedes - Benz automobiles, TM... ;-) -- Best Greg |
#7
|
|||
|
|||
Well, I guess!? -" there goes all my saved Delta FF Miles, down the
drain"! BN |
#8
|
|||
|
|||
|
#9
|
|||
|
|||
someone wrote:
Northwest has also been said to be close to bankruptcy. And soon, for related reasons, GM, Ford, ..... That's why some carmakers are opening plants or moving more production to Canada... They have closed plants in Canada too. The problem was that many of the health and retirement funds had assumed consistently growing active work force to help pay for the growing retired group. But as soon as companies began to cut active work forces, there were fewer people to help pay for the growing retirement costs (retirement fund and health care for retired) and that threw a big wrench into long term financial planning. |
#10
|
|||
|
|||
Clark W. Griswold, Jr. wrote: wrote: Well, I guess!? -" there goes all my saved Delta FF Miles, down the drain"! Why? Delta will file to reorganize, not to liquidate. The last thing in the world they will want to do is antagonize existing customers by tanking their FF program. If anything, they will likely offer bonus miles after filing. The Delta picture is pretty grim -- it reads like too little, to late. Let's put some figures together from the Chapter 11 announcement: * Delta, which has lost nearly $10 billion since January 2001 That's about one billion every 6 months. * Delta's total debt is roughly $20.5 billion, and it listed * $21.6 billion in assets as of June 30. That's 1.1 billion in net asset as of JULY. Even if Delta can operate with net revenue (I give that a probability of ZERO the next 12 months) its assets will be complete depleted within a year. I AUGUST, Delta stock reached its 43-year low of $2 a share. It closed at an all-time low, AGAIN, today, at 78 cents a share. That's loss of well over 60% in the value company held STOCKS in its June 30 figure of $21.6 in assets. Chapter 11 reorganization can help save companies that have temporary cash-flow problems. In Delta's case, what little is left of its 1 billion (facing 20 billion a debts) will require a MAJOR miracle for it to survive, for long. -- Bob. |
|
Thread Tools | |
Display Modes | |
|
|
Similar Threads | ||||
Thread | Thread Starter | Forum | Replies | Last Post |
Delta Queen Full Steam Ahead! | Ray Goldenberg | Cruises | 3 | August 31st, 2005 10:46 PM |
French vote NO on European Constitution | Mxsmanic | Europe | 159 | June 9th, 2005 09:53 PM |
Delta Halfing Their $100 Fee For Ticket Changing | Robert Cohen | Air travel | 1 | December 18th, 2004 09:33 PM |
DELTA Ponders Chapter 11 | Jim | Air travel | 2 | May 18th, 2004 06:17 PM |
Delta Queen Steamboat Inducted! | Ray Goldenberg | Cruises | 0 | January 22nd, 2004 02:25 PM |