Gość: jacek
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16.06.04, 16:46
prawie 20 proc...
Delta Air Can't Survive as Is--CEO
Wed Jun 16, 2004 10:00 AM ET
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By Kathy Fieweger
CHICAGO (Reuters) - Delta Air Lines (DAL.N: Quote, Profile, Research) Chief
Executive Gerald Grinstein on Wednesday said it is "completely clear" the No.
3 U.S. airline cannot survive as is, as fare levels continue to erode despite
an improving economy.
Many analysts and industry experts have speculated Atlanta-based Delta might
have to file for bankruptcy protection to significantly cut costs, but
Grinstein said Chapter 11 would be used only if no other path were available.
"While the situation is extremely serious and I cannot minimize that, the
marketplace has just simply undergone a fundamental, structural and permanent
change and we recognize it," Grinstein said.
Shares of Atlanta-based Delta were down 19 cents, or 3.2 percent, at $5.76 in
early New York Stock Exchange trading.
Low-cost competition in 70 percent of its markets and resulting weak air
fares have hurt Delta for a while.
The financial picture has worsened this year, Grinstein said. Adding to the
woes are soaring jet fuel prices, hurting both big and small airlines alike.
NO EASY ANSWERS
Delta's bigger rivals, American Airlines parent AMR Corp. (AMR.N: Quote,
Profile, Research) and United Airlines' parent UAL Corp. (UALAQ.OB: Quote,
Profile, Research) both have undergone the same analysis about the
marketplace and come up with different solutions.
United, the No. 2 airline, filed for bankruptcy in December of 2002 and has
yet to emerge as it awaits word from the federal government on a big loan
guarantee.
American narrowly avoided court protection in the spring of 2003 after it won
big concessions from labor unions, but its employee morale was seriously
undermined in the process.
Speaking at a transportation conference in New York, Grinstein said Delta's
access to capital markets has "virtually disappeared."
Delta on Tuesday said it was pulling back its September schedule for Song,
its low-fare airline unit, by 25 percent but expected to resume the full
schedule of 144 daily flights in October. Song is still an experiment of
sorts and its fate is uncertain.
A company review begun in January is expected to be complete by the second or
third week of August, Grinstein said.
Delta is still negotiating with the Air Line Pilots Association on reducing
pay rates. Grinstein said management would not accept concessions from
unionized pilots that provide only a partial solution to the airline's cost
problem.