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Mon, Apr 30, 2007

It's Official: Delta Air Lines Is Bankrupt No More

Carrier Exits Chapter 11 Ahead Of Schedule

ANN REALTIME REPORTING 04.30.07 1300 EDT: The last 19-months have been extremely difficult ones for Delta Air Lines, ever since the Atlanta, GA-based carrier filed for Chapter 11 bankruptcy in September 2005.

What followed that announcement included contentious negotiations between the airline and its pilots... that often appeared to threaten the very future of the airline, before an agreement was finally reached last year.

Several publications (including Aero-News) also took jabs at Delta for choosing to unveil pricey new uniforms under bankruptcy (shown at right), while at the same time asking workers to help clean planes gratis on their time off.

Oh, and then there was also the nagging threat of a hostile takeover by US Airways. Remember that?

Through it all, however, executives at Delta maintained their airline would survive, and exit bankruptcy by early 2007 -- a full year ahead of schedule. On Monday, the airline made good on that promise.

"This is an amazing day for an extraordinary company, which has reclaimed its heritage and has emerged from Chapter 11 as a fierce, determined and well-capitalized competitor," Delta chief bankruptcy attorney Marshall Huebner told CBS News.

CNN Money reports Delta emerges from bankruptcy a far different airline than before. In its quest to shave capacity, Delta shed roughly one airplane in six used by its mainline operations... which coincided with a surge in passenger bookings throughout the industry. Almost from the start, that allowed Delta to carry more passengers on fewer aircraft... while also charging passengers more money to do so.

"Through our restructuring we have successfully repaired our balance sheet, improved the customer experience, expanded our international route system and built a platform for future success," said Delta Chief Executive Gerald Grinstein.

On a darker note, the carrier also cut over 20 percent of the 60,000-strong workforce in place at the time of the bankruptcy filing.

Those employees remaining with the carrier note a change in the atmosphere at Delta, however... a return of sorts to its workforce-oriented roots, and a sense of camaraderie fostered by the airline's successful fight against the US Airways merger bid. Those warm-fuzzies are also, perhaps, due in part to the $480 million in cash and stock options the airline's employees are scheduled to receive, as part of a restructured pay and incentives package.

That plan also includes profit-sharing options and bonuses for staff and executives... but several Delta execs, including CEO Grinstein (right), have said publicly they won't accept the additional funds, in a show of solidarity.

Next up for Delta will be an announcement of rebranding efforts -- scheduled for Monday afternoon -- which many believe will include a new Delta livery. The carrier's new Board of Directors will also soon decide on two significant issues: what to do with Delta's trouble-plagued regional subsidiary, Comair, and who will succeed Grinstein once he steps down as Delta CEO.

For today, though... there is likely only one issue on the mind of Delta employees. Travel analyst Terry Trippler told CBS it's likely passengers may see "a bounce in the step" and "a smile on the face" of Delta workers... happy with the knowledge their airline is solvent once again.

FMI: www.delta.com

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