Delta Air Lines, which lost $2.6 billion in the first nine months of this year, needs the $3 billion in annual cost savings from its reorganization...
NEW YORK — Delta Air Lines, which lost $2.6 billion in the first nine months of this year, needs the $3 billion in annual cost savings from its reorganization plan to survive, Chief Financial Officer Edward Bastian told a bankruptcy court on Monday. He also said the company is not prepared for a strike by pilots and that such a strike would be “devastating.”
But U.S. Bankruptcy Court Judge Prudence Carter Beatty said Delta may have been wrong to spend $2.4 billion to buy back its own shares in the years before it filed for bankruptcy in September. “It is a question of if you had that money rather than had spent it that way, you might not be in the position you are in,” she said.
“In my opinion [the cost-reduction plan] is absolutely necessary,” Bastian told the court during the third day of a hearing on a Delta request to void its contract with pilots and impose $325 million in wage cuts.
“We are losing cash at a fairly alarming rate. If we don’t stop losing cash we won’t make it,” he said.
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The Air Line Pilots Association, the union representing the pilots, has offered $90.7 million in concessions and has threatened a strike if the court grants Delta’s request. Delta maintains such a walkout would violate the Railway Labor Act.
Uniformed pilots were at the courthouse Monday, as they were in earlier sessions dealing with the contract.
Delta is seeking cuts from its pilots to help offset rising fuel costs and stiff competition from low-fare competitors.