Carrier Plans To Regain Solvency April 30

It was the final hurdle ahead of Delta Air Lines, in its quest to exit bankruptcy after one-and-a-half years... and on Wednesday, the US Bankruptcy Court gave the Atlanta, GA-based airline its blessing.

"We're free at last," said Delta CEO Gerald Grinstein. "I feel elated."

Reuters reports Delta plans to exit bankruptcy April 30. In his ruling Wednesday, Judge Adlai Hardin overruled four objections from bondholders and shareholders, who complained of unfair treatment under the airline's reorganization plan.

"I will sign the confirmation order," Judge Hardin said at the hearing in New York.

The news comes after 19 months of often contentious labor negotiations, as Delta struggled for -- and ultimately won -- some $1 billion in pay cuts for pilots, flight attendants, and other airline employees. The airline also cut capacity, putting more passengers onto fewer planes just as the domestic airline industry experienced a surge in passenger bookings for 2006.

The path ahead, however, is somewhat less rosy for Delta... for it emerges from bankruptcy as there are signs of softening passenger demand. In its court filing, Delta said it expects to weather any potential downturns in the domestic market with its increased presence in international markets such as Latin America, and the Mideast.

As Aero-News reported, Delta was forced into bankruptcy September 14, 2005 after accumulating nearly $19 billion in debt, and $7.5 billion in losses between 2001 and 2005. Similarly beleagured Northwest Airlines entered bankruptcy on the same day.

Delta plans to issue new shares to creditors May 3, which will be traded on the New York Stock Exchange under the symbol "DAL." Old Delta shares will be cancelled.

The carrier expects to exit Chapter 11 with a market value of about $10 billion... making Delta the second-largest US airline in terms of market value, behind Southwest Airlines.

Next up for the newly-solvent Delta will be naming a successor to CEO Grinstein... and determining what to do with its troubled regional subsidiary Comair.

FMI: www.delta.com