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[Article] Delta Airlines may be forced into bankruptcy

  • 11-05-2004 4:53pm
    #1
    Victor
    Registered Users, Registered Users 2 Posts: 78,580 ✭✭✭✭


    http://www.rte.ie/business/2004/0511/delta.html
    Delta may be forced into bankruptcy
    May 11, 2004 07:48

    Delta Airlines, which flies from Atlanta to Dublin and Shannon, last night warned that it could file for bankruptcy.

    The warning, contained in a quarterly update to the Securities and Exchange Commission, was issued just three days after US Airways said it would consider returning to the bankruptcy court unless it could pare costs.

    Delta, the number three carrier in the US, reported a net loss of $773m last year, and another net loss of $383m in the first quarter of 2004.

    'Continued losses of the magnitude experienced in 2003 and the March 2004 quarter are unsustainable over the long term, and we have significant obligations due in 2005 and thereafter,' Delta said.

    It added that if could not cut costs, return to profits and borrow more money 'on acceptable terms' it would need to pursue 'alternative courses of action', including Chapter 11 bankruptcy.

    Under Chapter 11, a company may continue operating under court supervision while reorganising the business and trying to repay creditors over time.

    Delta said it had made 'substantial' net losses for three straight years and did not expect significant improvement in 2004.


Comments

  • #2
    secret_squirrel
    Closed Accounts Posts: 3,357 ✭✭✭secret_squirrel


    Poorly written story...afaik Chapter 11 is not bankrupcy as such. Infact its an established method of avoiding bankruptcy in the States. It allows them to suspend payments to their creitors whilst they restructure.

    Anyhows they deserve all they get imo. They have had 2.5 years to restructure and havent pulled their fingers out. And thats with shíte loads of US govt aid that they wasted. The other American carriers like AA and United are still in a crappy situation too afaik its about time they all got their act together.

    Look what the european airlines had to go through BA and Aer Lingus both had to make huge job cuts and slash fares and are both arguably better for it. AND they had to do it without state aid.


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