Delta Plans Profit, New Punch after Chapter 11

Expect a flurry of activity and perhaps a bolder carrier after a bankruptcy judge approves Delta Air Lines' reorganization plan April 25.

The airline is expected to formally emerge from 19 months of court protection April 30. A few days later, it will choose a stock exchange to list its new shares, select a ticker symbol and decide the number of shares that will circulate, Chief Financial Officer Ed Bastian said Tuesday.

"We are feeling very good about the progress, the momentum that we see is being built into the business," Bastian said during a conference call with reporters.

Bastian spoke during a break in a daylong conference in Atlanta with investors, the first since 2000. The airline offered a glimpse of its post-bankruptcy plan that includes posting its first annual profit this year. Bastian and other executives reaffirmed an earlier forecast of a 2007 pretax profit of $816 million.

But maybe as important, the Atlanta-based carrier will be "an acquirer" of another airline some time in the future, CEO Gerald Grinstein said. Delta also wants to name directors this week to serve on its post-bankruptcy board, fly to London's Heathrow airport under new "open skies" rules and open a route to Shanghai, China, sometime next year.

"This is not your granddaddy's Delta sitting in some backwater," Grinstein said. "It's now in a position to be one of the change agents of this industry."

The airline also expects to continue improving customer service and is considering selling some of its assets. Although Delta did not say in documents prepared for the conference what assets it plans to sell, Bastian suggested that Delta subsidiary Comair could be a target.

"We will, once we're out of bankruptcy, look at whether owning that business makes a lot of sense," Bastian told investors.

A pretax profit this year would end six years of losses at Delta, including a pretax loss of $452 million in 2006. The third-largest U.S. airline by traffic projects that revenue will increase 4 percent this year - almost three times as fast as the industrywide average.

Capacity, or available seat miles, will increase 2 percent to 4 percent, with domestic capacity down 1 percent to 3 percent and international capacity up 14 percent to 16 percent.

Grinstein said major carriers such as Delta and American are strong enough to hold the upper hand in any consolidation push. He said his airline, which successfully beat back a hostile bid from US Airways two months ago, most likely would be a pursuer rather than the pursued.

The next round of consolidation is "three to four years away," though Delta would have to react defensively if other mergers occur before then, Grinstein said.

Grinstein, 74, has said he will retire after Delta leaves bankruptcy and his successor is named. His preference is for an internal candidate. Bastian and Chief Operating Officer Jim Whitehurst are considered the leading internal candidates.

Bastian said Delta is forecasting a narrower loss of $25 million to $50 million in the first quarter, which ends Saturday. A year ago, the airline's loss was $350 million.

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