Citing in part the time it will take to further cut costs, Delta Air Lines Inc., the nation's third-largest carrier, asked a bankruptcy court judge Thursday to give the company a six-month extension to file its reorganization plan.
The Atlanta-based company, which filed for Chapter 11 in New York on Sept. 14, currently has a Jan. 12 deadline to exclusively file its reorganization plan and a March 13 deadline to seek acceptance of the plan from creditors.
In a filing with the court, Delta asked to extend the deadlines 180 days to July 11 and Sept. 9, respectively.
Once an exclusivity period ends, creditors are allowed to submit reorganization plans to the court.
"The debtors have made tangible progress toward their goal of developing a competitive cost structure while increasing revenues," Delta lawyers said in the filing. "However, as would be expected of companies as large as and with businesses as complex as the debtors', at this early stage there is a great deal more that needs to be done."
Delta had previously asked the court to reject its pilot contract so the airline could impose $325 million in concessions on its 6,000 pilots. But Delta asked the court to suspend the company's contract rejection request because of a tentative agreement on temporary pay cuts worth as much as $152 million a year that the sides worked out earlier this month.
Rank-and-file pilots must ratify the interim agreement by Dec. 28 for it to take effect.
The tentative agreement includes a 14 percent across-the-board wage cut for pilots and reductions in other pilot pay and cost items equal to an additional 1 percent hourly wage reduction. Before the deal, Delta's pilots were projected to make an average annual salary of $169,393 in 2005, according to company filings.
Delta has lost more than $11 billion since January 2001 and announced over that period that it would cut up to 33,000 jobs. It listed more than $28 billion in debt in its bankruptcy filing.
Besides the need for more time to reduce its cost structure, Delta said in Thursday's filing that it wants time to further implement changes in its route structure and aircraft fleet and to begin to explore possible sources of enough cash to emerge from Chapter 11.
The deadline for objections to Delta's request is Dec. 29. A hearing is tentatively scheduled Jan. 5.
"The debtors' goal is, of course, to develop and propose a plan of reorganization that will receive support from their various constituencies," Delta said in the filing. "Additional work and progress is necessary on many fronts in connection with the eventual development of such a plan of reorganization."
Also Thursday, Delta said the bankruptcy court recently approved a motion that limits trading of large quantities of Delta equity and debt. The order is part of a process to preserve the tax benefits of previous net losses, spokeswoman Gina Laughlin said.
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Delta Air Lines Inc.: http:http://www.delta.com
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The company has lost more than $14 billion over five years, but has been lessening its debt as it continues to cut costs.
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