comorin
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Joined: Sun May 29, 2005 5:52 am

Delta Seeking DIP Financing For Ch 11 Filing

Sat Sep 10, 2005 11:05 pm

Item in Washington Post:

http://www.washingtonpost.com/wp-dyn...le/2005/09/09/AR2005090902015.html

Explains the waiting, they're trying to line up 1.7B$ in financing.
 
padcrasher
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sat Sep 10, 2005 11:54 pm

Your title is jumping to conclusions. Delta obtained this same financing 1 year ago prior to renegotiating the pilot contract. You do not negotiate with creditors or labor without having the financing in place. That presents them with a choice, work with us now or work with us later.

[Edited 2005-09-10 16:57:09]
 
TPASXM787
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 12:00 am

Padcrasher, they're going to file before 10/17. They have to. Anyone with a basic knowledge of accounting can see that their debts far outweigh their assets and they are hennoraging money every day.

I love DL, I have flown them many times, but it's only a matter of time before DL and most likely NW go Chapter 11.
This is the Last Stop.
 
padcrasher
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 12:07 am

There is no significance to 10/17, as I've said many times before.

Of course you will not provide us one single aspect of the new law that even matters to Delta will you? Nor will be you be able to show by the numbers how the cash position/burn is insurmountable.

It must be nice being part of the herd. Never really having to do the math. Never really understanding the operation. Just repeating what you heard.
 
Bicoastal
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 12:10 am

No, Padcrasher, this is much different than the financing Delta lined up a year ago. They're going Chapter 11 with this new financing. They tried to avoid Chapter 11 with the loans they received a year ago. But, it didn't work. Now they're forced into a less desirable alternative to survive.
Airliners.net has many forums. It has spell check and search functions. Use them before posting!
 
AirRyan
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 12:16 am

Quoting TPASXM787 (Reply 2):
I love DL, I have flown them many times, but it's only a matter of time before DL and most likely NW go Chapter 11.

The only problem NW has is fuel costs and in securing lower labor costs from their unions - they all but appear to have busted AMFA's strike, the ALPA pilots are ready to deal, and the FA's will pretty much do what the other two unions do so combined with the fact that NW still has $1.7B in cash, NW very well may not file.

I'd like to see the cost comparison between their DC-9 which is paid for but uses more gas and more maintenance and compare that with even say a lease of Embraer's new E-Jets (E-170-E-195.) If NW didn't have 150+ paid-for but expensive to operate compared to the new jets on the market DC-9's, NW's gas bill would could be significantly lower.
 
padcrasher
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 12:25 am

No Bicostal its the same exact financing. You are referring to other types of loans to save and obtain more cash.




Just-in-case financing expected at Delta

Staff report
Published on: 09/10/04


A Wall Street analyst expects Delta Air Lines to soon announce that it has arranged debtor-in-possession financing in case it goes into Chapter 11 status.

The analyst, Robert Ashcroft of UBS, said he believes the company and its pilots will achieve deals that could avert a filing.



But in a research note he added: "Struggling on the brink is dangerous, so there is a chance the parties step off the cliff by mistake. . . . Expect an announcement in the near future that Delta has arranged debtor-in-possession financing."

So-called DIP financing is used by companies to ensure a source of capital and credit during a bankruptcy case.

Delta this week said it could go to court at the end of this month unless it stems a wave of pilot early retirements that began earlier this year.

The pilots can wait until the day before they leave to inform the company — possibly disrupting schedules if too many leave on short notice. They can collect part of their benefits in a lump sum that Ashcroft said is typically around $300,000.
 
padcrasher
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 12:31 am

Yet another article from the Times from last year.

New York Times


Delta Air Lines has begun arranging the financing it will need if it seeks bankruptcy protection, something Wall Street analysts, industry executives and finance experts say could happen within weeks, people with direct knowledge of Delta's actions said yesterday.

Delta, which is based in Atlanta, is holding discussions with lenders like GE Commercial Finance, which provided it restructuring money last year and could do so again, in or out of bankruptcy, these people and others in the financial community said. A spokesman for GE Commercial declined to comment.

The airline is also exploring the sale or refinancing of its two commuter lines, Comair and Atlantic Southeast Airlines. And it is looking for more savings from employees, who have already taken $1.4 billion a year in wage and benefit cuts, although it does not plan to reduce wages.

Delta has lost nearly $10 billion since 2001, with its losses accelerating over the last year. Its chief executive, Gerald Grinstein, had emphasized a desire to avoid Chapter 11 bankruptcy, which it barely averted last October by obtaining $1 billion in cuts from its pilots. But last month, Mr. Grinstein said that circumstances beyond Delta's control, namely higher oil prices and industry competition, could force its hand.


***************************

Any more chicken littles out there who want to go another round?
 
positiverate
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 12:31 am

Quoting Padcrasher (Reply 3):
There is no significance to 10/17, as I've said many times before.

Um, actually there is. October 17 looms as a significant date because pending amendments to the federal bankruptcy code will implement less favorable terms for debtors. In simple terms, that means if the airline does plan to enter bankruptcy protection, it will be better served by getting it over with quickly rather than waiting and facing a stricter bankruptcy code.
 
comorin
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 12:35 am

The title merely indicates the contents of the link!  Smile

Delta's situation today is very different from a year ago. The $375M cuts sought then have been wiped out by fuel escalations (1c rise = $25M). While NWA's balance sheet can support a threat of Ch 11 unless concessions are made, Delta's balance sheet no longer supports that strategy, and will file as soon as the financing is ready. DIP financing is now being put in place to ensure a bankruptcy filing that doesn't end up in a liquidation or auction, and preserves Delta's value as a going concern.

Since DIP financing assumes a supercredit status, I wonder what collateral is left at Delta to secure this funding without subordinating senior creditors. If such collateral doesn't exist, debt repayment can still get pushed to the top of the heap as an Administrative Expense under bankruptcy laws, I guess...
 
padcrasher
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 12:37 am

Um, then you will tell us "exactly" what aspect of the law benefits Delta and how it applies exactly.

Then I'll whip out my transcript of the CFO's discussion of said law and destroy your feeble attempt.
 
positiverate
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 12:48 am

Quoting Padcrasher (Reply 10):
Then I'll whip out my transcript of the CFO's discussion of said law and destroy your feeble attempt.

Take a pill and lose the attitude j.o.

The changes take effect regarding business reorganization under Chapter 11, including tighter restrictions on executive compensation and required deposits for utility services. Other changes to the law give company creditors such as landlords and suppliers more say in various aspects of the bankruptcy process. For example, creditors will be allowed to submit their own reorganization plan if a debtor does not produce one within 18 months after filing. Every analyst is saying if they file they have to do it before 10/17.

Of course Grinstein and Palumbo/Bastian are saying 10/17 doesnt mean anything. They don't want a run by the pilots on the pension plan to get their lump sums, which is clearly what would happen if they acknowledged such a deadline. Quit drinking the Kool-Aid.
 
comorin
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 12:49 am

Quoting Padcrasher (Reply 10):
Then I'll whip out my transcript of the CFO's discussion of said law and destroy your feeble attempt.

Before you whip anything out, may I ask you why you think Ch 11 is a Chicken Little- Sky Falling scenario? The Bankruptcy courts are more like the US Cavalry riding in to save Delta. Sure beats liquidation, or being run by a bunch of kids in a distressed-debt hedge fund...
 
padcrasher
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 12:51 am

Quoting Comorin (Reply 9):
Delta's situation today is very different from a year ago. The $375M cuts sought then......

It's good to know Comorin that you're on the ball. You are one of the very few that know that Delta only sought on $375 million in cuts last year.

That's why your prediction of Chapter 11 filing carries so much weight.
 
padcrasher
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 12:56 am

They addressed each of the 5 aspects of the law, and gave a valid, legitimate reason only one would apply to Delta (length of time limit for restructuring without challenges to plan of 18 Months) and why it matters not in the least to Delta as they have a restructuring plan 95% in place.

Next?
 
OPNLguy
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 12:57 am

Quoting Positiverate (Reply 11):
Take a pill and lose the attitude j.o.

I wonder if A.net's servers are going to be able the load of all the "I told you so" messages to Padcrasher "should" Delta seek Chapter 11 protection....
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
Midway2AirTran
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 12:58 am

Quoting Padcrasher (Reply 10):
Um, then you will tell us "exactly" what aspect of the law benefits Delta and how it applies exactly.

No matter what happens with the BK laws still does not change the fact that DL is in big debt and lacks ability to pay it making a filing very likely for the time being. The seeking of DIP is obviously in preparation that they expect it will happen.

If they wait till after Oct.17 management will lose some control over the reorganization to the judge/large creditors and the timing to exit is short. It would make more sense to some not to have to deal with those new rules.
"Life is short, but your delay in ATL is not."
 
positiverate
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 1:00 am

Quoting Padcrasher (Reply 14):
They addressed each of the 5 aspects of the law, and gave a valid, legitimate reason only one would apply to Delta (length of time limit for restructuring without challenges to plan of 18 Months) and why it matters not in the least to Delta as they have a restructuring plan 95% in place.

Of course they did because, like I said, they do not want a run on the lump sums from the pilot pension plan should they acknowledge a 10/17 deadline. Did they mention that? Or did you miss that because you were getting more Kool-Aid then?  Smile
 
positiverate
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 1:02 am

Quoting OPNLguy (Reply 15):
I wonder if A.net's servers are going to be able the load of all the "I told you so" messages to Padcrasher "should" Delta seek Chapter 11 protection....

Believe me, I hope they don't have to and I am wrong. No one wants to go through a BK filing; it's unpleasant.
 
padcrasher
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 1:02 am

Quoting OPNLguy (Reply 15):
I wonder if A.net's servers are going to be able the load of all the "I told you so" messages to Padcrasher "should" Delta seek Chapter 11 protection

I already have a rough draft of my "October 18th" thread...LOL

It may be two days before I lay by bloody cleaver down...LOL
 
aa777jr
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 1:03 am

Talk to anyone that knows anything about aviation futures and they will all tell you it is necessary for DL to file for Chapter 11 to reorganize their company. It's very necessary to allow this to happen so the pilot contracts can be torn up and renegotiated. They need to be paid less and spend that extra cash on more planes and service. If they continue to bleed this badly they will lose a hub, SLC or CVG.

Quoting TPASXM787 (Reply 2):
they're going to file before 10/17.

 checkmark 

Quoting Positiverate (Reply 11):
Take a pill and lose the attitude j.o.

 rotfl 

Go Delta?
A liberal is a man who is right most of the time, but he's right too soon.
 
FlyPNS1
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 1:04 am

Quoting Padcrasher (Reply 14):
They addressed each of the 5 aspects of the law, and gave a valid, legitimate reason only one would apply to Delta (length of time limit for restructuring without challenges to plan of 18 Months) and why it matters not in the least to Delta as they have a restructuring plan 95% in place.

Unfortunately, the restructuring plan they have in place isn't working so well. The restructuring plan from last year called for an expansion of CVG...but now they are going against the plan and shrinking CVG. The restructuring plan from last year planned on oil being at $35 a barrel. While I guess that is still possible, it doesn't seem likely. Of course the hardest part will be dealing with all the creditors...many of whom DL has a very poor relationship with.

Given how slow DL's management has been to do anything to save the company, I think DL would struggle to meet the 18 month requirement.
 
OPNLguy
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 1:05 am

Quoting Positiverate (Reply 18):
Believe me, I hope they don't have to and I am wrong. No one wants to go through a BK filing; it's unpleasant.

Agree completely. That said, 11 is better that 7, especially under the current rules and not those that take effect in October....
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
BigGSFO
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 1:05 am

It's also my understanding that under the new law filing ch. 7 (liquidation) will be much more difficult if not impossible. Thus creditors will not be able to get their hands on the assets that were used as collateral so they might not lend the money in the first place.

Remember bankruptcy is not a death sentence. It's a reorganization. DL isn't going away - probably never will. But the laws allow them some breathing room to rearrange their debt and become more efficient. If UA's three year dog-and-pony show in bankruptcy proves anything it's that the courts will bend over backwards to keep an airline aloft.
 
comorin
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 1:06 am

Quoting Padcrasher (Reply 13):

Thank you, Padcrasher! I am glad you feel that way. The $375M I was referring to are the cuts currently being sought ($275M from Pilots, $100M from others) - My error in phrasing. I did read the Times article before I posted, simply as it is linked in my reference article.

Point is, if you look at the financials, and the conclusions reached about the same set of numbers by smarter people than me at Morgan Stanley, UBS and A.Net, Ch 11 is a no-brainer.

We haven't even touched on the topic of Ch 7....

Padcrasher, I have to go now. I do hope other Anetters will pitch in and help you see the light.
 
OPNLguy
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 1:07 am

Quoting Padcrasher (Reply 19):
I already have a rough draft of my "October 18th" thread...LOL

It may be two days before I lay by bloody cleaver down...LOL

Those might be viewed by some as indications that you need to get a life....
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co.
 
padcrasher
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 1:12 am

Quoting Aa777jr (Reply 20):
Talk to anyone that knows anything

How often does this happen with you? Really be honest?

Quoting FlyPNS1 (Reply 21):
Unfortunately, the restructuring plan they have in place isn't working so well

Well what Q did they not make their goals? If fact you know the restructuring plan has gone right as planned. They will make the goals again this Q as well.
You think changing route structure focus proves the TA plan is not working? That's the most idiotic thing I think you've said. So Delta shifting focus to higher yielding Intl after the new revenue Mgt guy came in proves the TP isn't working well?...LOL

Whatever. More fodder for my cannon come report time.
 
FlyPNS1
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Joined: Wed Dec 01, 1999 7:12 am

RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 1:24 am

Quoting Padcrasher (Reply 26):
Well what Q did they not make their goals? If fact you know the restructuring plan has gone right as planned. They will make the goals again this Q as well.

So what if they made their goals? The goals they set weren't high enough. If you set the bar low enough, anyone can achieve their goals...doesn't make them a success. If your goal for life is work serving fries at McDonalds and you achieve that goal, does that make you a success??? Sure, you met your goal, but it was such a low goal it just doesn't mean much.

Was threatening CH11 (again) part of the restructuring plan?
Was begging for another round of concessions part of the restructuring plan?

If the restructuring plan had been such a success, we wouldn't be having this conversation right now. However, the restructuring plan failed because it made unrealistic assumptions about fuel. Of course, you are the only person on the planet that believes that fuel isn't important to the airline industry.
 
padcrasher
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 1:32 am

No you're confused again. The TP was never sold as a BK proof plan. What did happen and what you know happened is a continued surge in fuel prices.

You said the "restructuring plan" isn't working well. Wrong. It's worked like a charm.

What is needed are additional measures to compensate for the increase in fuel. No argument here. But get it right. It has nothing to with the TP.
 
BigGSFO
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 1:33 am

Quoting FlyPNS1 (Reply 27):
If the restructuring plan had been such a success, we wouldn't be having this conversation right now. However, the restructuring plan failed because it made unrealistic assumptions about fuel. Of course, you are the only person on the planet that believes that fuel isn't important to the airline industry.

I agree. In addition it would appear DL is scrambling to raise cash between the ASA and 767 sales and CVG reduction. It might be too little too late. Only time will tell.
 
FlyPNS1
Posts: 5272
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 1:43 am

Quoting Padcrasher (Reply 28):
You said the "restructuring plan" isn't working well. Wrong. It's worked like a charm.

If it worked like a charm, DL wouldn't be doing so poorly. The restructuring plan made UNREALISTIC assumptions about fuel. DL management assumed fuel prices would go down, even though all indicators said it would go up. That was a critical FAILURE in the transformation plan.

The transformation has been successful in lowering non-fuel costs. However, I'm not so sure the transformation plan has delivered the type of revenues that DL had hoped for.

I'll agree that the Oct17 date is largely meaningless....DL will file when the are ready to file. Heck, I'll even go out on a limb and say there's still a way for DL to avoid CH11 altogether. Though that would require a lot work to get done in a very short window of time.
 
srbmod
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 1:43 am

Even the Atlanta Fishwrapper is getting in on the speculation:
Delta board meets; bankruptcy talk grows

To sum up the article:

The DL Board of Directors meet in a special session in NYC Friday, heightening the speculation that a CH 11 is imminent. Lawyers hired to represent groups of retired employees confirm the board meeting, but not the contents of the meeting. The sale of EV to OO netted DL $325 million upfront, but that is not enough to stave off CH. 11. The article goes on to mention that DL is working with GE to arrange D.I.P. financing.
 
hiflyer
Posts: 1271
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 1:43 am

Quoting BigGSFO (Reply 29):
It might be too little too late. Only time will tell.

Time is not on DAL's side in this endeavor.

The same sources DAL is trying to arrange from are also undoubtedly being hit by NWAC and possibly even Indy Air.

Every 24hrs their costs are escalating and their losses are deepening

Every 24 hrs investor confidence is eroding

Every 24 hrs more and more articles appear on their situation further depressing loads
 
avpilot01
Posts: 81
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 1:46 am

I used to work for DL, I would hate to see them file for CH.11, however, I think it is the best decision in order to get their costs down to reasonable levels. Throw out old contracts, restructure, get your costs in line and continue to proceed forward. If they stay outside of bankruptcy and keep hemmoraging money like they are, they could be filing for CH.7 liquidation sooner than anyone expected, especially if fuel prices keep rising like they are now.
 
FRA2DTW
Posts: 236
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RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 2:51 am

While most of you are focused on 10/17, the filing is most likely to come before Sept. 30. That is the date the next wave of senior pilots can take early retirement with only one day's notice. By filing before then, they can avoid paying lump sum pensions of 300k per retiree on average, and the exodus is likely to be huge with the handwriting on the wall that BK is inevitable. The filing will stop the pilot drain and the huge pilot retraining costs associated with it.
 
ltbewr
Posts: 12424
Joined: Thu Jan 29, 2004 1:24 pm

RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 3:07 am

If they want to do it before 9/30, then DL better do it fast as 9/30 is a Friday. I wouldn't be surprised that they do a deal where they file for BK after closing time of the BK court they choose (usually 5:00 pm) on or before Sept. 29th to beat the pilots to them filing for lump sum retirement payments. I wouldn't be surprised to see them file even soon, perhaps the weekends of Sept. 17th-18th or 24th-25th. The recent sharp spike and continuing long term problems as to fuel prices as well as the affects on business from Hurricane Katrina, may also supr them to go to BK sooner. A sooner filing would not only screw the pilots, but also beat out certain creditors that would have an advantage after the revisions of the BK laws go into affect.
There is also the possibility that the date the BK laws revisions to go into affect on Oct. 17, 2005, may be changed due those who may need to file for bankruptcy due to Hurricane Katrina, but I wouldn't bet on it.
 
TPASXM787
Posts: 1667
Joined: Tue Mar 29, 2005 6:31 am

RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 5:35 am

10/17 will be the last possible date, but filing earlier wouldn't surprise me at all.

I'd love to see all the airlines chugging along making money. It's simply not happening. Even UA's plan is asinine at best (unless they are right and fuel goes down $25 a barrel, believe me I will be the first one to eat my words!)

Ch.11, as mentioned above, would be like the calvary coming into save DL. I don't give a damn if they score another $375m in cuts, it's not enough. Kinda like the levee's in NO were made to handle a Cat 3, DL's plan didn't call for $70/barrel oil.

Quoting AirRyan (Reply 5):
I'd like to see the cost comparison between their DC-9 which is paid for but uses more gas and more maintenance and compare that with even say a lease of Embraer's new E-Jets (E-170-E-195.)

Ah, the venerable Diesel-9's. I guess having a plane that gets shitty gas mileage is better than on you have to make $300k a month payments+gas on? I'd like to see that as well.

Quoting AirRyan (Reply 5):
NW still has $1.7B in cash, NW very well may not file.

I hope niether file! I have some 80k SkyMiles/WorldPerks miles I want to go back to the old days when I flew TPA-DTW on a 727 and got more food for breakfast that I could eat all day!

Sadly, two of my favorites have fallen on hard times. All the best to both of them (I know my comapny owns some NW jets and we don't want them back!)
This is the Last Stop.
 
AirRyan
Posts: 2398
Joined: Wed Mar 30, 2005 9:57 am

RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 6:01 am

Quoting BigGSFO (Reply 23):
If UA's three year dog-and-pony show in bankruptcy proves anything it's that the courts will bend over backwards to keep an airline aloft.

That's what I was going to mention - looks like UA has taken their sweet time in Ch. 11 and is only now about to finally emerge after 3 years or so.

Quoting FRA2DTW (Reply 34):
While most of you are focused on 10/17, the filing is most likely to come before Sept. 30. That is the date the next wave of senior pilots can take early retirement with only one day's notice. By filing before then, they can avoid paying lump sum pensions of 300k per retiree on average, and the exodus is likely to be huge with the handwriting on the wall that BK is inevitable. The filing will stop the pilot drain and the huge pilot retraining costs associated with it.

I agree, but I'd rather see my friends dad take the $300k lump sum and take his services over to AA where he has a few years left before the FAA makes him retire. Or that $300k could probably buy a senior Delta pilot a type rating in a Gulfstream or something and than that 60 year age mandatory retirement age wouldn't matter when flying in the corporate world.
 
MD88Captain
Posts: 1224
Joined: Wed Nov 14, 2001 9:50 am

RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 7:07 am

You guys are really over-emphasizing pilot retirements. Most if not all have pilots that can leave have left. Those remaining have other circumstances tying them to the job (divorce decrees). The last holdouts went 1 September. And since it takes 6-8 weeks to get the lump-sum checks, those guys probably left too late. I'd be surprised to see another 50 leave on 01 October. The exodus started in January and anyone who has waited this long has waited too late. The first day orders before the BK judge will include termination of all lump-sum payouts.

It is amazing to hear employees who still believe it will not happen. I've listened to Mr. Grinstein personally and I'm hearing a change in his resolve. $70/barrel oil against a business plan that factors $45/barrel oil (on the high side) will seal the deal. BK is coming. Heck, BK is here.
 
Alitalia744
Posts: 3777
Joined: Thu Mar 30, 2000 8:22 am

RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 7:35 am

Quoting MD88Captain (Reply 38):
Heck, BK is here.

Sad but probably very true. MD88, assuming you fly for DL, hats off to you and all the employees of DL.

Hopefully, (I'm no financial expert), with BK (if it happens), DL can redo their cost structure and somehow turn a profit. The industry's best airline employees deserve better...

Long live the Widget. Fly DELTA Jets!
Some see lines, others see between the lines.
 
panamair
Posts: 3767
Joined: Fri Oct 12, 2001 2:24 am

RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 8:13 am

Quoting FlyPNS1 (Reply 30):
If it worked like a charm, DL wouldn't be doing so poorly. The restructuring plan made UNREALISTIC assumptions about fuel. DL management assumed fuel prices would go down, even though all indicators said it would go up. That was a critical FAILURE in the transformation plan.

Hindsight is always 20/20..when the Plan was being hatched, even the most pessimistic did not conceive of oil at $65-$70 a barrel (heck, even WN and B6 are now giving in to fare increases despite their fuel hedges)

If Grinstein had gone to the pilots and asked for $2 billion in concessions because he thought fuel was going to be at $70 a barrel, he would have been laughed out of the room by Malone and Co.
 
positiverate
Posts: 1543
Joined: Thu May 05, 2005 10:35 pm

RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 8:17 am

PadCrasher: still waiting for you to whip out your CFO transcript and tell me why I'm wrong about the 10/17 deadline and the run on the pension plan by the pilots...
 
positiverate
Posts: 1543
Joined: Thu May 05, 2005 10:35 pm

RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 8:18 am

Quoting AirRyan (Reply 5):
The only problem NW has is fuel costs and in securing lower labor costs from their unions

Really the only problem they have at DL is fuel costs too...
 
positiverate
Posts: 1543
Joined: Thu May 05, 2005 10:35 pm

RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 8:20 am

Quoting OPNLguy (Reply 25):
Those might be viewed by some as indications that you need to get a life....

Brilliant.
 
BOS2LAF
Posts: 353
Joined: Wed Sep 22, 2004 8:21 am

RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 9:25 am

Quoting Padcrasher (Reply 3):
There is no significance to 10/17, as I've said many times before.

Oh ye of too much faith, maybe you should check this out...

Northwest union doubts deal is near (Yahoo news)

Quote:
Northwest has said time is running out for it to avoid bankruptcy. Oct. 16 is the last day before a new, more restrictive bankruptcy law takes effect, and CEO Doug Steenland has acknowledged that the law change is one factor in the company's bankruptcy considerations.

So, if the new laws aren't of significance to one airline, than why is another airline different? It's been argued here that NW is in a better position than DL (even though they're both in trouble), so if NW is worried about it, you can damn well be sure that DL is more worried about it.

Thanks for playing.  wave  (and if that seems like I'm being rude, well, you get what you give)
 
brokenrecord
Posts: 747
Joined: Tue Jul 12, 2005 6:45 am

RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 11:50 am



Whiskey Tango Foxtrot? Over.
 
AirRyan
Posts: 2398
Joined: Wed Mar 30, 2005 9:57 am

RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 11:56 am

Quoting MD88Captain (Reply 38):
You guys are really over-emphasizing pilot retirements. Most if not all have pilots that can leave have left. Those remaining have other circumstances tying them to the job (divorce decrees). The last holdouts went 1 September. And since it takes 6-8 weeks to get the lump-sum checks, those guys probably left too late. I'd be surprised to see another 50 leave on 01 October. The exodus started in January and anyone who has waited this long has waited too late. The first day orders before the BK judge will include termination of all lump-sum payouts.

It is amazing to hear employees who still believe it will not happen. I've listened to Mr. Grinstein personally and I'm hearing a change in his resolve. $70/barrel oil against a business plan that factors $45/barrel oil (on the high side) will seal the deal. BK is coming. Heck, BK is here.

Ouch, I did not know that. How many of you all Mad Dog pilots might be able to find a job at say AA if worse comes to worse?

Quoting Panamair (Reply 40):
heck, even WN and B6 are now giving in to fare increases despite their fuel hedges)

Yet another reason why I do not like Southwest - "those bastards!"
 
Midway2AirTran
Posts: 847
Joined: Wed Jul 16, 2003 7:34 am

RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 1:17 pm

A perfect resolve for the industry and would be for oil to trade up to $80/barrel than drop to $30 afterward.

^Just as Joe Leonard said in the special AirTran article in ATW this month.

Just let the efficient carriers fill in the voids while the rest keeps reorganizing and bite the dust! DL and NW just don't have the improving revenue numbers that legacy counterparts AA and CO have. Even UA appears to have turned the Titanic and starting to get positive.

Back to Delta..
Why couldn't DL separate Song and spin it off for cash if Song was doing so well? Of course now it would be too late, but it would have allowed them to rid some aircraft then turn focus on their mainline improvements and on international ops.
"Life is short, but your delay in ATL is not."
 
DeltaMIA
Posts: 1622
Joined: Wed Feb 04, 2004 11:53 am

RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 1:21 pm

Quoting Midway2AirTran (Reply 47):
Why couldn't DL separate Song and spin it off for cash if Song was doing so well? Of course now it would be too late, but it would have allowed them to rid some aircraft then turn focus on their mainline improvements and on international ops.

They aren't on a separate operating certificate. The only assets are the planes and a couple of slots at LGA.
It's a big building with patients, but that's not important right now.
 
comorin
Posts: 3857
Joined: Sun May 29, 2005 5:52 am

RE: Delta Seeking DIP Financing For Ch 11 Filing

Sun Sep 11, 2005 1:44 pm

Being Saturday nite and all, I thought I'd add my plan for Delta's salvation:

1. Delta's employees chip in 2.5K each ($168M) and take Delta private.

2. They sell 2 planes and get their money back.

3. They now own an airline with a Net Worth of -$5.7B.

4. The average salary/employee at Delta is $83K (per 10Q), so everybody takes a 50% cut for 2 years.

5. Delta saves $2.7B a year for 2 years, becomes profitable.

6. In 2 years, revenues also go up as competitors get hit by high costs, cut capacity, and public also gets used to fuel surcharges.

7. Revenue growth of 15% in 2 years lets Delta employees go back to normal salaries.

8 Delta now IPOs for $10B, and employees get resticted stock for $5B.

9. Rest of proceeds go to retire some debt and fund pensions. Happy ending for all.

10. Delta now strong enough to take on LCCs and others no longer hedged - new motto is 'Bring it On!'


Ok, this may be the dumbest post on A.Net so far, but at least I tried to save Delta!