ATLANTA, Aug. 4, 2006 (PRIMEZONE) -- As expected, Delta Air Lines (Other OTC:DALRQ) today took the next step toward termination of the Delta Pilots Retirement Plan by filing a motion seeking U.S. Bankruptcy Court approval of the termination. The Air Line Pilots Association, the union representing more than 6,800 Delta pilots, does not oppose the termination of the plan.
Delta's other defined benefit pension plan, covering approximately 91,000 active and retired flight attendant and ground employees, is not affected by this action.
Delta previously announced its intent to seek to terminate the pilot plan, citing a financial and operational crisis from which it could not recover should the plan remain in effect. On June 19, 2006 Delta provided its active and retired pilots with a Notice of Intent to Terminate the pilot plan. Delta also served notice at that time to the Pension Benefit Guaranty Corporation (PBGC), the federal agency which insures defined benefit pension plans. The plan covers more than 13,000 active and retired Delta pilots and their beneficiaries. The proposed effective date of termination of the plan is Sept. 2, 2006.
In its earlier announcement, Delta stated it was seeking the distress termination of the pilot plan because the plan's costs are unaffordable and would prevent the company from successfully reorganizing and emerging from bankruptcy. The company said the pilot plan's costs are expected to exceed $1 billion in the near term alone, even if pension reform legislation passed by Congress is signed into law.
Delta voluntarily filed for Chapter 11 reorganization under the U.S. Bankruptcy Code on September, 2005. Barring any disruptions, the company is on track to achieve more than 70 percent of its business plan's benefits by the end of this year, with the goal of successfully emerging from bankruptcy in the first half of 2007.
Delta Air Lines (Other OTC:DALRQ) offers customers service to more destinations than any other global airline with Delta and Delta Connection carrier service to 295 destinations in 46 countries. With more than 50 new international routes added in the last year, Delta is America's fastest growing international airline and is the world's leading carrier between the United States and Europe with flights to 29 trans-Atlantic destinations. To Latin America, Delta offers nearly 500 weekly flights to 47 destinations and is on track to become the second-largest carrier in the region. Delta's marketing alliances also allow customers to earn and redeem SkyMiles on more than 14,000 flights offered by SkyTeam and other partners. Delta is a founding member of SkyTeam, a global airline alliance that provides customers with extensive worldwide destinations, flights and services. Including its SkyTeam partners, Delta offers flights to 470 worldwide destinations in 96 countries. Customers can check in for flights, print boarding passes and check flight status at delta.com.
The Delta logo is available at http://www.primezone.com/newsroom/prs/?pkgid=1825
Statements in this news release that are not historical facts, including statements regarding our estimates, expectations, beliefs, intentions, projections or strategies for the future, may be "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the estimates, expectations, beliefs, intentions, projections and strategies reflected in or suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to, the actions and decisions of our creditors and other third parties with interests in our Chapter 11 proceedings; our ability to obtain court approval with respect to motions in the Chapter 11 proceedings prosecuted from time to time; our ability to develop, prosecute, confirm and consummate one or more plans of reorganization with respect to the Chapter 11 proceedings and to consummate all of the transactions contemplated by one or more such plans of reorganization or upon which consummation of such plans may be conditioned; risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period for us to propose and confirm one or more plans of reorganization, to appoint a Chapter 11 trustee or to convert the cases to Chapter 7 cases; our ability to obtain and maintain normal terms with vendors and service providers; our ability to maintain contracts that are critical to our operations; our ability to maintain adequate liquidity to fund and execute our business plan during the Chapter 11 proceedings and in the context of a plan of reorganization and thereafter; our ability to comply with financial covenants in our financing agreements; labor issues, including our ability to reduce our pilot labor costs to the level called for by our business plan and possible strikes or job actions by unionized employees; our ability to implement our expanded transformation plan successfully; the cost of aircraft fuel; pension plan funding obligations; interruptions or disruptions in service at one of our hub airports; our increasing dependence on technology in our operations; our ability to retain management and key employees; restructurings by competitors; the effects of terrorist attacks; and competitive conditions in the airline industry.
Additional information concerning risks and uncertainties that could cause differences between actual results and forward-looking statements is contained in Delta's Securities and Exchange Commission filings, including its Form 10-K, filed with the Commission on March 27 2006.
The risks and uncertainties and the terms of any reorganization plan ultimately confirmed can affect the value of our various pre-petition liabilities, common stock and/or other securities. No assurance can be given as to what values, if any, will be ascribed in the bankruptcy proceedings to each of these liabilities or securities.
We believe that our currently outstanding common stock will have no value and will be canceled under any plan of reorganization we propose, and that the value of our various pre-petition liabilities and other securities is highly speculative. Accordingly, we urge that caution be exercised with respect to existing and future investments in any of these liabilities and/or securities. Investors and other interested parties can obtain information about Delta's Chapter 11 filing on the Internet at delta.com/restructure. Court filings and claims information are available at deltadocket.com. Caution should be taken not to place undue reliance on Delta's forward-looking statements, which represent Delta's views only as of Aug. 4, 2006, and which Delta has no current intention to update.