I posted this in another thread. This taken this morning from a travel industry publication I subscribe to...
Dual bankruptcy filings for Delta, NWA; both say biz as usual (09/14/2005)
Northwest's tour subsidiary, MLT, to continue as well
By Andrew Compart
WASHINGTON -- Delta and Northwest both filed for Chapter 11 bankruptcy protection Sept. 14, but both said they expect to continue normal operations.
That includes flying a full schedule, honoring tickets, maintaining frequent flyer programs and paying suppliers for goods and services received during the reorganization process.
Some of that will require court approval, which usually comes quickly in Chapter 11 filings.
Northwest also noted that its tour subsidiary, MLT, also will continue normal operations.
ARC confirmed it is continuing to process transactions for Delta but, with Northwest’s filing just minutes old at press time, said it was still in discussions with that carrier.
The filings put nearly half the U.S. airline industry’s capacity in Chapter 11, although US Airways is on schedule to emerge from its second bankruptcy by the end of this month via a merger with America West. United, in Chapter 11 for nearly three years, recently filed a plan it said would take it out of bankruptcy as early as February.
Other airlines in Chapter 11 include Aloha and ATA.
In filing for Chapter 11, Delta said it has arranged as much as $2.05 billion in post-petition financing. That includes a commitment for $1.7 billion in debtor-in-possession financing from GE Commercial Finance and Morgan Stanley. Delta said it also has an agreement in principle with American Express to provide an additional $350 million of secured financing.
Delta said it plans to use Chapter 11 filing to reconfigure its fleet and network. It plans to remove four aircraft types by the end of 2006, which would still leave it with seven on its mainline system, and deploy smaller aircraft on many of its routes.
The plan also involves more downsizing at its hubs and a continued shift to more international routes, which have been more profitable.
Delta said it also needs to implement more pay and benefit cuts and eliminate more jobs. It will not make the next required contribution to its employee defined-benefit pension plan, but said a decision on whether to terminate those plans may depend on the fate of legislation before Congress that would let Delta extend the time period for making pension contributions.
