ATLANTA, May 31, 2006 – Delta Air Lines (Other OTC: DALRQ) today confirmed that its pilots, represented by the Air Line Pilots Association International (ALPA), ratified a new contract that the company hailed as “crucial to Delta’s successful reorganization.” With 95 percent of eligible pilots participating, 61 percent voted in favor of the agreement. The contract, subject to U.S. Bankruptcy Court approval, provides the company with approximately $280 million in average annual pilot labor cost savings through a combination of changes to pay, benefits and work rules. If approved by the Court, the agreement will become effective June 1, 2006 and amendable on Dec. 31, 2009.
“The additional pilot savings are a significant, necessary and appreciated component of Delta’s restructuring plan. Everyone at Delta at every level is contributing, personally and professionally, to Delta’s long-term success and their efforts, coupled with network and revenue improvements and other restructuring initiatives, are delivering measurable results. We stand unified and focused on the shared goal of transforming our airline into a strong, fiercely competitive and profitable company – one that can grow and provide good jobs and financial rewards for its people and superior service and amenities to its customers. Our company has a solid plan for the future and Delta people are making real progress together,” said Gerald Grinstein, Delta’s chief executive officer.
Barring any disruptions, the company is on track to achieve approximately 70 percent of its business plan’s $3 billion annual targeted financial benefits by the end of the year with the goal of successfully emerging from bankruptcy in the first half of 2007.
“We believe this new pilot agreement helps provide the competitive framework necessary for Delta’s successful restructuring, and is in the best interest of all stakeholders,” said Edward H. Bastian, Delta’s executive vice president, chief financial officer and head of the company’s in-court restructuring efforts.
Delta this week reached an agreement with DP3, Inc., the organization representing retired Delta pilots on pension issues and, in addition to the Pension Benefit Guaranty Corporation (PBGC), was one of only two parties objecting to the pilot agreement. With its concerns resolved, the retired pilot organization has withdrawn its opposition, and the federal pension agency is now the sole objector to the pilot contract. The company strongly disagrees with the PBGC objection and maintains those assertions are without merit. The matter is pending before the U.S. Bankruptcy Court, and a hearing is scheduled later today.
Delta Air Lines (Other OTC: DALRQ) is one of the world’s fastest growing international carriers with more than 50 new international routes added or announced in the last year. Delta offers flights to 447 destinations in 96 countries on Delta, Delta Shuttle, the Delta Connection carriers and its worldwide partners. In summer 2006, Delta plans to offer customers more destinations and departures between the U.S., Europe, India and Israel than any global airline*, including service on 11 new transatlantic routes from its Atlanta and New York-JFK hubs. Delta also is a major carrier to Mexico, South and Central America and the Caribbean, with nearly 40 routes announced, added or applied to serve since Jan. 1, 2005. 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. Customers can check in for flights, print boarding passes and check flight status at delta.com.
*From the U.S., based on July 2006 OAG.
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 business 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 on March 27, 2006 and its Form 10-Q, filed on May 12, 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 May 31, 2006, and which Delta has no current intention to update.