$6.2B Loss by Delta Really a Gain in Recovery

The bankrupt airline said the huge losses were largely a result of one-time restructuring charges rather than daily operations.


At the conclusion of the case, those claims are expected to be converted into stock in the newly reorganized company.

The charges were partly offset by a $719 million income tax benefit, also related to shedding the pilots' pension plan.

Delta CEO Gerald Grinstein said the results, coupled with the bankruptcy court's recent decision to allow the airline to seek creditor approval of its reorganization plan, gives Delta "great momentum" toward exiting bankruptcy this spring.

He said Delta remains on track to emerge "as a strong, healthy and independent global competitor."

The airline recently secured $2.5 billion in financing for its reorganization plan from six heavyweight Wall Street firms.

That helped it beat back a hostile takeover bid from US Airways, which wanted Delta's creditors to force the airline into merger talks.

Creditors declined to back the US Airways bid.

To emerge from Chapter 11, Delta needs the votes of a majority of its creditors who hold two-thirds of the total value of creditors' monetary claims. Delta has set an April 9 voting deadline and an April 25 court hearing for its reorganization plan.

IT ADDS UP TO IMPROVEMENT

* $6.2 BILLION LOSS FOR 2006

It sounds bad but mainly consists of Chapter 11 restructuring charges related to the value of settled bankruptcy claims, Delta says. Without them, the loss was $406 million, an improvement compared to $2.2 billion in 2005.

* $2 BILLION FOURTH-QUARTER LOSS

Same as above. Without restructuring charges the loss was $179 million vs. $782 million a year earlier.

PROFIT, REVENUE

* $58 million operating profit for 2006

Delta says this figure, which excludes all restructuring charges, plus interest, taxes and other expenses, reflects basic operations. It was the first annual operating profit since 2000.

* $4.1 billion revenue for 2006

Up from $3.9 billion in 2005, despite a cut in Delta's total seat capacity as it realigns routes.



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