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NEW YORK (Reuters) - Delta Air Lines Inc. (NYSE
AL_W - news) emerged from bankruptcy on Monday, after completing a $3 billion restructuring over the past 19 months.
"This is a great day in Delta's history," Chief Executive Gerald Grinstein said in a statement. "Delta is now a fierce competitor in a tough industry."
Delta, the third largest U.S. airline, emerges as a leaner carrier after cutting capacity and about $1 billion in labor costs. It also added more than 60 international routes to escape brutal low-fare competition in the U.S.
While the U.S. airline industry turned a profit last year for the first time since before the September 11, 2001 attacks, Delta emerges from reorganization amid signs that travel demand, which fueled the industry's recover, is softening.
A number of U.S. airlines, including Southwest Airlines Co. (NYSE:LUV - news) and JetBlue Airways Corp. (Nasdaq:JBLU - news), have recently complained of sluggish bookings ahead of the busy summer travel season.
But Delta believes its expansion into lucrative international markets and its lower costs will help it overcome a downturn.
"Delta used the Chapter 11 process to completely transform every aspect of our business ... That will enable us to weather future volatility in the airline industry," said Chief Financial Officer Edward Bastian in a statement.
Delta has forecast a pretax profit, before special items, of $816 million this year, after a loss of $452 million in 2006.
To finalize its exit from Chapter 11, Delta said it will close on a $2.5 billion exit-financing facility led by banks including JPMorgan, Goldman Sachs, and Merrill Lynch.
The financing package will be used to repay the company's $2.1 billion debtor-in-possession loan, make payments associated with exiting bankruptcy and increase liquidity, Delta said.
A U.S. bankruptcy court had on April 25 given the airline the go-ahead to exit bankruptcy at the end of this month.
Delta's restructuring is projected to cut its net debt by more than half to $7.6 billion at the end of 2007 from $16.9 billion at June 30, 2005, it said.
The company will issue new common shares in payment of bankruptcy claims and as part of a post-emergence compensation program for Delta employees, the airline said.
Regular trading in the new stock is expected to begin on the New York Stock Exchange on May 3 under the symbol "DAL". Until then, they will trade on a when-issued basis.
Delta's old shares, which had been trading over-the-counter, are being canceled. Holders of these shares will receive nothing under the reorganization plan, the company said.
AL_W - news) emerged from bankruptcy on Monday, after completing a $3 billion restructuring over the past 19 months. "This is a great day in Delta's history," Chief Executive Gerald Grinstein said in a statement. "Delta is now a fierce competitor in a tough industry."
Delta, the third largest U.S. airline, emerges as a leaner carrier after cutting capacity and about $1 billion in labor costs. It also added more than 60 international routes to escape brutal low-fare competition in the U.S.
While the U.S. airline industry turned a profit last year for the first time since before the September 11, 2001 attacks, Delta emerges from reorganization amid signs that travel demand, which fueled the industry's recover, is softening.
A number of U.S. airlines, including Southwest Airlines Co. (NYSE:LUV - news) and JetBlue Airways Corp. (Nasdaq:JBLU - news), have recently complained of sluggish bookings ahead of the busy summer travel season.
But Delta believes its expansion into lucrative international markets and its lower costs will help it overcome a downturn.
"Delta used the Chapter 11 process to completely transform every aspect of our business ... That will enable us to weather future volatility in the airline industry," said Chief Financial Officer Edward Bastian in a statement.
Delta has forecast a pretax profit, before special items, of $816 million this year, after a loss of $452 million in 2006.
To finalize its exit from Chapter 11, Delta said it will close on a $2.5 billion exit-financing facility led by banks including JPMorgan, Goldman Sachs, and Merrill Lynch.
The financing package will be used to repay the company's $2.1 billion debtor-in-possession loan, make payments associated with exiting bankruptcy and increase liquidity, Delta said.
A U.S. bankruptcy court had on April 25 given the airline the go-ahead to exit bankruptcy at the end of this month.
Delta's restructuring is projected to cut its net debt by more than half to $7.6 billion at the end of 2007 from $16.9 billion at June 30, 2005, it said.
The company will issue new common shares in payment of bankruptcy claims and as part of a post-emergence compensation program for Delta employees, the airline said.
Regular trading in the new stock is expected to begin on the New York Stock Exchange on May 3 under the symbol "DAL". Until then, they will trade on a when-issued basis.
Delta's old shares, which had been trading over-the-counter, are being canceled. Holders of these shares will receive nothing under the reorganization plan, the company said.
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