ATLANTA, Nov. 27, 2006 – Delta Air Lines today announced that working with DP3, Inc., the group representing a majority of Delta’s retired pilots before the bankruptcy court, it has secured the support of the Official Committee of Unsecured Creditors to allow an additional estimated $719 million in unsecured, pre-petition claims for non-qualified pension benefits for its retired pilots. Together with claims already approved in a prior settlement with DP3, retired Delta pilots and their beneficiaries now will have a total of approximately $800 million in allowed claims.
“We are extremely pleased that our work with these groups to secure claims to improve pension benefit recoveries for our retired pilots was successful. As a result of this effort, our retired pilots will recover through the claim process a significant portion of their unpaid non-qualified benefits,” said Edward H. Bastian, Delta’s chief financial officer.
The agreement, subject to bankruptcy court approval, allows these general unsecured claims in the Delta bankruptcy cases and calculates the present value using factors that are favorable to retired pilots taking all considerations into account.
These “post-termination claims” arise from the period on and after the expected Sept. 2, 2006 termination date of the non-qualified pilot pension plans. Once the individual calculations are completed, they are expected to add up to approximately $719 million. Earlier this year, these parties reached agreement on “pre-termination claims” totaling approximately $80 million for the period between Delta’s chapter 11 filing in September of 2005 up to Sept. 2, 2006.
Together, retired pilots are expected to be awarded allowed claims on account of unpaid nonqualified pension benefits of approximately $800 million, $9 million of which will be administrative in nature, with the balance being general, unsecured, pre-petition claims.
“This agreement represents another important milestone in what we believe is shaping up to be a very successful transformation of Delta, and we remain focused on proceeding with our plan to emerge from bankruptcy in the first half of 2007 as an independent, stand-alone company,” Bastian said.
Delta Air Lines (Other OTC: DALRQ) offers customers service to more destinations than any global airline with Delta and Delta Connection carrier service to 290 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 a leader across the Atlantic with flights to 28 trans-Atlantic destinations. To Latin America and the Caribbean, Delta offers more than 400 weekly flights to 49 destinations. 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 and worldwide codeshare partners, Delta offers flights to 445 worldwide destinations in 92 countries. Customers can check in for flights, print boarding passes and check flight status at delta.com.
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; 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 November 9, 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 November 27, 2006, and which Delta has no current intention to update.