"Cincinnati Airport's bill won't be fully paid by Delta"

Tuesday, December 6, 2005
 
Airport's bill won't be fully paid 
Judge presses airline to be realistic about recovery
By Tom Becker
Bloomberg News

 
A lawyer for Delta Air Lines Inc. told a bankruptcy judge it's "a safe
assumption" the company won't be able to fully repay creditors - including
Cincinnati/Northern Kentucky International Airport - owed almost $28.3
billion.

Delta is asking U.S. Bankruptcy Judge Prudence Carter Beatty to authorize
pay cuts for its pilots to save $325 million a year, part of its plan to
reduce expenses by $3 billion. The pilots union opposes the request. As
hearings on the matter entered their seventh day, Beatty said Delta hasn't
given her a clear indication of what it needs to reorganize.

"I have not heard anything that I will say remotely impressed me that you
have the money, the talent or the thought that you could successfully
reorganize in this case," she said.

The airline hasn't filed a plan explaining how it intends to exit bankruptcy
and repay creditors. Companies who file under Chapter 11 of the U.S.
bankruptcy code typically don't repay all their debt. Unsecured creditors,
for example, usually get about 40 cents on the dollar.

Delta's largest local creditor is the airport, where the airline operates
its second-largest hub. Because of unpaid landing fees and other
non-payments, Delta owes the airport about $2.9 million. The airport is a
non-voting member of the creditors' committee, but airport officials have
not yet filed a claim for the money.

Beatty told Delta lawyer Marshall Huebner that the airline hasn't given her
enough information, including what kind of financing it will need.

Huebner said Delta will provide the information through testimony from
company officials and advisers.

Also Monday, Beatty said MacKay Shields LLC might want to give up its place
on the airline's unsecured creditors' committee so it can keep trading Delta
shares for its clients.


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