Increases Unrestricted Cash By Approx. $800 Million

Delta Air Lines announced Wednesday it amended its Visa/MasterCard processing agreement to eliminate the $1.1 billion holdback previously required.

This holdback consisted of an $800 million cash reserve and a related $300 million letter of credit. The amendment allows the entire amount of the cash reserve returned to Delta and the letter of credit terminated.

As a result of these changes, Delta expects to end the quarter with $4.2 billion in liquidity, including a fully available $1 billion revolving line of credit, according to the carrier.

"This new agreement reflects the strong confidence of the financial markets in our ability to deliver on our plan's commitments," said Edward H. Bastian, Delta's executive vice president and chief financial officer. 

The company also updated its June 2007 quarter guidance, stating that it expects to achieve operating margins of 11 percent to 12 percent.

"Our plan remains on track, with our restructuring driving improvements to both unit revenues and unit costs," said Bastian. "In this highly competitive industry, Delta is uniquely positioned in its ability to reallocate existing assets to right-size the domestic network and focus on international growth opportunities."

FMI: www.delta.com