Delta warns pilots of cash stockpile drop
08-19-2005, 09:35 PM
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Delta warns pilots of cash stockpile drop
Reuters
Delta warns pilots of cash stockpile drop
Friday August 19, 10:32 pm ET
By Deena Beasley
LOS ANGELES (Reuters) - Delta Air Lines Inc. (NYSE
AL - News) warned pilots on Friday that its cash stockpile had dropped below a key level that could allow it to seek more concessions from the pilots' union, a company spokesman said.
"This is not a surprise action. We have given the Air Line Pilots Association a heads up to let them know that Delta's financial situation has fallen short of earlier assumptions," company spokesman Andy McDill said.
Delta pilots last November ratified a concession package aimed at saving the carrier $1 billion a year, in a move crafted to buy time for the company to restructure outside of bankruptcy.
As part of that plan Delta agreed not to seek further concessions while cash remained above a certain level. It was required to inform the pilots union if the cash stockpile fell below that level, and it sent a memo to pilots on Friday following the drop.
On its web site, the pilot's union said the letter from Delta was "nothing more, nothing less" than a notice that the company's liquidity has fallen below the threshold liquidity level.
The company reported last month that it had $1.7 billion in unrestricted cash and short-term investments as of the end of June. The threshold level was not disclosed.
Delta has lost almost $10 billion since 2001, as it has struggled with a multi-year travel slump triggered by the Sept. 11, 2001 attacks on New York and Washington, D.C., and now high oil prices and competition from low-cost carriers.
Capt. John Malone, chairman of Delta's ALPA union group, said in the web posting that the labor contract remains unchanged for now.
"We are doing everything possible to increase our financial situation," Delta's McDill said.
Delta warns pilots of cash stockpile drop
Friday August 19, 10:32 pm ET
By Deena Beasley
LOS ANGELES (Reuters) - Delta Air Lines Inc. (NYSE
AL - News) warned pilots on Friday that its cash stockpile had dropped below a key level that could allow it to seek more concessions from the pilots' union, a company spokesman said."This is not a surprise action. We have given the Air Line Pilots Association a heads up to let them know that Delta's financial situation has fallen short of earlier assumptions," company spokesman Andy McDill said.
Delta pilots last November ratified a concession package aimed at saving the carrier $1 billion a year, in a move crafted to buy time for the company to restructure outside of bankruptcy.
As part of that plan Delta agreed not to seek further concessions while cash remained above a certain level. It was required to inform the pilots union if the cash stockpile fell below that level, and it sent a memo to pilots on Friday following the drop.
On its web site, the pilot's union said the letter from Delta was "nothing more, nothing less" than a notice that the company's liquidity has fallen below the threshold liquidity level.
The company reported last month that it had $1.7 billion in unrestricted cash and short-term investments as of the end of June. The threshold level was not disclosed.
Delta has lost almost $10 billion since 2001, as it has struggled with a multi-year travel slump triggered by the Sept. 11, 2001 attacks on New York and Washington, D.C., and now high oil prices and competition from low-cost carriers.
Capt. John Malone, chairman of Delta's ALPA union group, said in the web posting that the labor contract remains unchanged for now.
"We are doing everything possible to increase our financial situation," Delta's McDill said.
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