A u. S. bankruptcy-court judge Tuesday approved Delta Air Lines' request to sell some airplanes and to reject an Atlanta office lease. Judge Prudence Carter Beatty...
NEW YORK — A U.S. bankruptcy-court judge Tuesday approved Delta Air Lines’ request to sell some airplanes and to reject an Atlanta office lease.
Judge Prudence Carter Beatty said she would allow Delta to sell an undisclosed number of aircraft, including Boeing 737, Embraer 120 and Boeing 767 models. It was not evident whether Delta has a buyer for the aircraft or how much it might get for them. No details were disclosed on the office lease.
The ruling came as Delta management and its pilots union prepared to present their cases in a fourth day of hearings devoted to Delta’s motion to reject the contract, a move the airline says it needs to successfully emerge from bankruptcy.
Tuesday’s hearing also featured testimony from an industry specialist, Daniel Kasper, a managing director of LECG, which provides expert testimonials.
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Kasper testified for Delta that the bankrupt airline’s financial woes were due to the emergence of low-cost carriers, increased customer use of the Internet for buying low-price tickets and a reluctance among business travelers to buy high-cost tickets. At the same time, he said, the airline has been saddled with high labor costs.
Delta wants to eliminate the pilot contract so it can cut labor costs, which the company says it needs to successfully emerge from bankruptcy.
Capt. Lee Moak, chairman of the Delta Airlines Pilots Association, questioned the validity of comparing Delta’s financials to those of a low-cost carrier.
“At some point they have to decide what they want to be: a low-cost carrier or a full-service international carrier,” Moak said after court. He added: “They [Delta] want to have low-cost carrier costs on a full-service international carrier.”
Delta, which filed for Chapter 11 on Sept. 14, has about 50,000 employees, of which about 6,000 are pilots. It is looking for $3 billion in annual savings overall, and $325 million from pilots.