Delta Air Lines shares plunged 10 percent yesterday after the nation's third-largest carrier warned it will record a substantial loss for...
ATLANTA — Delta Air Lines shares plunged 10 percent yesterday after the nation’s third-largest carrier warned it will record a substantial loss for the rest of the year and will need to file for bankruptcy if its cash reserves fall too low or lenders seek immediate debt repayment.
Delta said in a Securities and Exchange Commission filing that it continues to face significant challenges due to historically high fuel prices and low fares.
The Atlanta-based airline said it is considering several moves to stay afloat, including more cost cuts and potential asset sales. But even that may not be enough.
“There can be no assurance that we will be able to implement any of these strategies or that these strategies, if implemented, will be sufficient to enable us to maintain adequate liquidity,” the filing said.
Most Read Stories
- Foreign buyers drop off as Seattle housing market hits hottest tempo since 2006 bubble
- What drivers can and cannot do under Washington state's new distracted-driving law
- ‘A painful and frustrating experience’: Horizon Air scheduling havoc will continue into the fall
- 'Security concerns' shutter Seattle's Movie Night at Magnuson Park
- 3 killed in crash on Alderwood Mall Parkway in Lynnwood
Delta, which reported a nearly $1.1 billion loss in the first quarter, had $1.8 billion in unrestricted cash at the end of March. But the filing said Delta expects its cash level will drop substantially by the end of the year if it can’t increase revenue, cut more costs, sell assets or restructure debt.
The carrier said the financing agreements that it signed with American Express and General Electric last fall to help avoid a bankruptcy filing at that time require that it maintain at least $1 billion in unrestricted cash through Oct. 31 and $750 million at all times thereafter.
Failure to comply with the agreement could result in the lenders demanding immediate payment of the money owed, the airline said.
Jet-fuel costs have risen about 50 percent in the past year for U.S. carriers.
Pilots approve pact with Hawaiian Air
HONOLULU — Hawaiian Airlines pilots have ratified a new three-year labor agreement, the final hurdle for the carrier to emerge from Chapter 11 bankruptcy, airline and union officials said yesterday.
All six of Hawaiian’s unions have negotiated new contracts, a condition for the carrier to exit its 2-year-old bankruptcy reorganization.
The pilots’ contract includes a 1 percent pay raise in each year of the plan, increased per diem and miscellaneous work-rule improvements, according to the Air Line Pilots Association.
Hawaiian, the nation’s 12th-largest carrier, filed for Chapter 11 bankruptcy protection in March 2003.
Since then, Hawaiian has negotiated new labor contracts and restructured its aircraft leases, including those with Boeing’s finance unit, Boeing Capital.