Delta Air Lines pulled back from the edge of a bankruptcy filing after reaching a tentative agreement with its pilots union late Wednesday. The Air Line Pilots Association reportedly consented to roughly $1 billion in wage and benefit cuts over five years, though neither side confirmed the figure. Delta shares jumped 17 percent to $5.80 on the news.
Analysts cautioned that the deal alone would not guarantee the airline's survival. Smith Barney's Dan McKenzie said Delta still needed to secure between $600 million and $800 million in additional cash, beyond funding already in place, and that creditors showed little enthusiasm for the carrier's restructuring plan. Debt restructuring and a ratification vote by rank-and-file pilots remained unresolved.
Delta separately renegotiated contracts with its 185 flight superintendents and reached a bondholder agreement to push $135 million in near-term debt out to 2007, offering higher-rate promissory notes and new equity in return.
The third-largest US carrier has been squeezed by soaring fuel costs and competition from discount carriers. Third-quarter losses reached $646 million, nearly four times the year-earlier figure. The broader industry is under similar strain: US Airways filed for Chapter 11 protection in September, United Airlines remains in bankruptcy, and discount carrier ATA sought court protection on Tuesday.
Historical summary. TurkishPress restated this AFP wire report, first published in October 2004, in its own words.