Delta Stock Falls to New 43-Year Low

Aug. 3, 2005
Shares of the Atlanta-based airline fell 44 cents, or 14.8 percent, to close at $2.53 in heavy trading on the New York Stock Exchange.

ATLANTA (AP) -- Delta Air Lines Inc.'s stock fell to a 43-year low Tuesday as the nation's third-largest carrier tries to right itself amid persistent fears about bankruptcy.

Shares of the Atlanta-based airline fell 44 cents, or 14.8 percent, to close at $2.53 in heavy trading on the New York Stock Exchange.

That's Delta's lowest close since the University of Chicago business school's Center for Research in Security Prices began tracking such data in 1962, said Alan Myers, director of database research for the center.

Delta's previous 43-year low was set on May 11, when its stock closed at $2.74.

Delta has lost nearly $10 billion and announced 23,000 job cuts since January 2001. Its chief executive said in a memo to employees last week that the company's current transformation plan, which includes cutting annual costs by $5 billion by the end of next year, is not enough to save the struggling carrier.

CEO Gerald Grinstein said Delta is still working hard to avoid a Chapter 11 filing, but he reiterated there are risks affecting the airline's ability to do that.

''The window of opportunity is closing,'' airline analyst Ray Neidl of Calyon Securities in New York said Tuesday.

Delta, citing high fuel prices, reported late last month that it lost $388 million in the second quarter.

Bear Stearns analyst David Strine said in a research note Friday that based on his firm's analysis of the rate at which Delta is burning cash, there is a high probability of a Chapter 11 filing by Delta by the fourth quarter of this year.

Some analysts have speculated Delta might file before new bankruptcy laws take effect Oct. 17 that will make it harder for companies to wipe away debt in Chapter 11.