"Salt Lake airport may be braced against possible Delta bankruptcy"

Wednesday, May 12, 2004

Salt Lake airport may be braced against possible Delta bankruptcy
The Associated Press


SALT LAKE CITY -- Some airport officials see Delta Air Lines' warning of
possible bankruptcy as negotiating posture against its pilots, among the
industry's highest paid. The airline is seeking deep cuts in pilot pay.

But there's no doubt that Delta is struggling -- it lost more than $3
billion in the last three years -- and a bankruptcy reorganization or filing
eventually could disrupt or curtail service at Salt Lake's airport, where
Delta accounts for 73 percent of the traffic.

Delta's Salt Lake hub is Twin Falls air travelers' only nonstop destination,
via flights by a Delta Connection carrier.

"We would work very diligently to replace air service as needed," airport
spokeswoman Barbara Gann said Tuesday.

"We have a strong population base and serve a region. Those things are in
our favor," she said.

Salt Lake is among a handful of major airports that depend heavily on a
single carrier. Others include Atlanta and Cincinnati, where Delta has its
first and second-largest hubs; Denver, where United Airlines dominates, and
Minneapolis, where Northwest Airlines rules.

Salt Lake is Delta's third-largest hub.

Industry officials say a Chapter 11 bankruptcy reorganization initially
would freeze Delta operations, requiring a judge's approval for any major
business decisions and leading to no quick changes.

And Delta already has restructured operations at Salt Lake, laying off 130
of 4,500 Utah workers last fall and reshuffling routes. It cut back some
lagging routes, increased frequency of more profitable routes and shifted
more business to regional carriers.

Those changes put Salt Lake's airport "ahead of the curve" on any bankruptcy
action by Delta, said Philip Gee, spokesman for SkyWest, a Delta partner
that runs 196 daily flights out of Salt Lake City including the ones to Twin
Falls.

"We benefited quite a bit from the restructuring," Gee said. "We added about
50 flights a day more from Salt Lake City than we had before."

SkyWest, which also does business for other carriers, has already
experienced the Chapter 11 filing of another major partner, United Airlines,
which expects to come out of the protection this year.

"Initially, nothing changes at all," Gee said. "The operation continues
day-to-day. We had no problems early on with the United operation
whatsoever. If Delta files, we're looking at no knee-jerk reactions to take
place because everything has to be approved in bankruptcy court."

Delta revealed the bankruptcy option Monday in a regulatory filing, saying
it may have to seek Chapter 11 protection if pilots don't agree to
significant wage cuts.

The pilots make $100,000 to more than $300,000 a year, Delta spokesman
Anthony Black said Tuesday. The company has about 7,800 working pilots.

The company wants a 30 percent pay cut from the pilots, who are offering 9
percent and say they will forgo a 4.5 percent raise they were to have
received earlier this month. In a statement, the pilots union said it is
negotiating in good faith to assist Delta in lowering costs.

Labor is Delta's biggest cost -- about 40 percent of expenses -- and pilot
salaries top the labor costs, Black said.

Asked how Delta's Salt Lake operations may change after a bankruptcy filing,
Black said, "I would not want to speculate on what may or may not happen
based on the possibilities."


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