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"Delta reaches impasse in talks on Cincinnati airport bonds"


 
Thursday, December 21, 2006

Delta reaches impasse in talks on airport bonds 
By Greg Paeth
The Cincinnati (OH) Post

 
Delta Air Lines may have reached an impasse in its negotiations with the
Kenton County Airport Board, which operates Cincinnati/Northern Kentucky
International Airport, and the trustee for $438 million in revenue bonds
that were used to build Delta's terminal.

The deadlock was noted in Delta's bankruptcy reorganization plan that was
filed Tuesday.

In the face of billions of dollars of losses since 2001, Delta has been
trying to restructure its agreement with the airport so it can reduce
payments on bonds that were issued by the airport.

Wil Ziegler, general counsel for the airport, said negotiations are ongoing
and are covered by a confidentiality agreement that prohibits him from
discussing the talks. He did say that bondholders, not the airport, stand to
lose money if Delta doesn't meet its financial obligations.

Delta has held similar negotiations with airport boards in Los Angeles,
Portland, Dallas, Tampa and its home city of Atlanta.

The airline owes more money to the Cincinnati airport - $413.6 million -
than it does to any of the other facilities.

Darryl Laddin, an airline bankruptcy attorney in Atlanta, said it's not
unusual for airlines to renegotiate their deals with airports when they face
financial obstacles.

He pointed out that Delta was very cautious in the wording of its statement
about Cincinnati, saying the negotiations "appear to have reached an
impasse."

He also pointed out that the document says Delta is "heavily dependent" on
its hub operations, including Cincinnati.

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