Delta seeks millions to pay its advisors as it posts another loss
AP Business Writer
ATLANTA ” Delta Air Lines Inc., the nation’s third-largest carrier, asked a bankruptcy court judge Friday to approve $3.9 million in payments to some of the airline’s advisers.
The request came as the Atlanta-based airline reported a $300 million loss in January and its pilots increased the amount of their offer as part of a second round of long-term concessions.
The pilots union says it will strike if its contract is thrown out by a panel of arbitrators that will hold hearings starting March 13. Chief Executive Officer Gerald Grinstein, at a public event Friday, told reporters “Delta is cooked” and will not survive if the pilots strike.
Delta, which filed for bankruptcy protection in New York in September, has sought to void its contract with the union if it can’t reach a consensual deal with its pilots.
The professional fees to Delta’s auditors and advisers include a request to pay more than $1.8 million to the consulting firm of former New York City Mayor Rudolph Giuliani.
Thursday evening, Delta reported a slightly narrower loss of $300 million in January, according to its monthly operating report filed with the bankruptcy court.
The monthly report says the loss for the 31-day period compares with a loss of $314 million for the same period a year ago. It said that excluding one-time restructuring items, Delta’s loss would have been $213 million in January.
The figure brings Delta’s total red ink since January 2001 to $12.6 billion. An industry downturn began that year, in which the Sept. 11 attacks also took place.
Delta said it continued to cut costs, adjust its route network and restructure aircraft leases in the month on which it reported. The carrier also said it received authorization from the bankruptcy court to resume buying fuel hedging contracts to try to reduce its exposure to upticks in fuel prices.
The airline has been seeking up to $325 million in long-term pay and benefit cuts from its 6,000 pilots, who had been offering about $115 million in average annual concessions. The company has offered to reduce its request to $305 million, while the pilots union said in a memo Thursday night that it has upped its offer to $140 million.
The cuts, which would replace an interim deal reached in December, are on top of the $1 billion in annual concessions the pilots agreed to in a five-year deal reached in 2004.
Grinstein said Friday that the second round of long-term cuts being discussed are important to Delta’s recovery.
“One of the reasons why it’s important is we ultimately want to get out of bankruptcy, and you’ve got to get financing to do that,” Grinstein said. “And so having a comprehensive agreement is important to everyone within Delta.”