ATLANTA (AP) -- Delta Air Lines Inc. warned Tuesday that it will record a substantial loss for the final nine months of the year, and said it will need to file for bankruptcy if its cash reserves fall too low or some of its lenders demand immediate payment of its debts.
Shares of the third largest U.S. airline sank more than 7 percent in early trading.
Delta said in a Securities and Exchange Commission filing that it continues to face significant challenges due to historically high fuel prices and low ticket fares.
''Accordingly, we believe that we will record a substantial net loss for the nine months ending Dec. 31 and that our cash flows from operations will not be sufficient to meet all of our liquidity needs for that period,'' the filing said.
Delta said that it is considering several moves to keep itself afloat, including more cost cuts and potential asset sales.
But even that may not be enough.
''There can be no assurance that we will be able to implement any of these strategies or that these strategies, if implemented, will be sufficient to enable us to maintain adequate liquidity,'' the filing said.
Delta, which reported a nearly $1.1 billion (euro860 million) loss in the first quarter, had $1.8 billion (euro1.4 billion) in unrestricted cash at the end of March.
But in the filing, the airline said it expects that its cash level will be substantially lower by the end of the year if it can't increase revenue, cut more costs, sell assets or restructure debt.
Delta said the financing agreements that it signed with American Express Co. and General Electric Co. last fall to help avoid a bankruptcy filing at that time require that it maintain certain cash levels.
While the airline did not specify those levels in the filing, it said failure to comply with the agreement terms could result in the lenders demanding immediate payment of the money they are owed.
''If this were to occur, or if our level of cash and cash equivalents and short-term investments otherwise decline to an unacceptably low level, we would need to seek to restructure under Chapter 11 (bankruptcy protection),'' Delta said.
Some analysts have speculated that Delta will sell its feeder carriers Comair Inc. and Atlantic Southeast Airlines. The Atlanta-based company did not specify its plans in the filing.
Delta shares fell 24 cents, or 7.3 percent, to $3.06 in early trading on the New York Stock Exchange.
