Delta faces $4 billion or more in airplane lease claims

[FWAAA]

Uh-oh. This could slow down the fast-track Ch 11 exit we keep hearing about.

Disney says that Delta didn't learn anything from the UAL airplane lease claims nightmare:

Delta Faces $4B in Plane-Lease Claims, Court Documents Say

WASHINGTON (AP) -- Delta Air Lines Inc.'s liability to investors who financed 270 of its aircraft in return for tax benefits could exceed $4 billion, new court documents show.

The numbers suggest Delta faces a confrontation over its aircraft-financing deals that could be nearly as large as the one UAL Corp.'s United Airlines experienced in the final stages of its bankruptcy reorganization. United's exit from Chapter 11 proceedings was nearly delayed by a quarrel over $5.1 billion in so-called leverage-lease claims.

Delta, the country's third-largest airline by passenger traffic, has spent a year in bankruptcy proceedings and is aiming to complete its reorganization by the middle of 2007. In papers filed with the U.S. Bankruptcy Court in Manhattan, Delta has proposed rules for resolving the claims disputes, saying it wants to avoid UAL's experience.

But a growing number of aircraft financiers have objected to the proposal, saying the rules would make matters worse. Many of the financiers happen to be the same investors who quarreled with United -- including Walt Disney Co. . In separate filings with the court this week, dozens of financiers said Delta owes them more than $4 billion.

Disney said Delta's proposed rules suggested the airline hadn't learned a "lesson" from United's experience with aircraft claims. Instead, it said, Delta is "attempting to invent entirely new, untested, unwieldy, and unfair processes." Those processes, the entertainment conglomerate said, are "likely to run aground."

http://biz.yahoo.com/ap/061006/delta_lease_claims.html?.v=1

Too funny. All we keep hearing is how DL is so far ahead of where UAL was after the same amount of time in Ch 11 and now comes the real story.

 

[aislehopper]

Many of the financiers happen to be the same investors who quarreled with United -- including Walt Disney Co. .

It's a small world after all . . . .

 

[hp_fa]

When I read the article, especially the Disney quotes, I could not help but to think of WT.

I found a couple of WTism's just for old times sake.

However, DL went in and has done its job in BK better and faster than any other airline before it and has obviously done it so it doesn’t need to be repeated. That is a notable accomplishment and something you certainly can’t say about UA.

DL has accomplished more in 8 months in BK than UA did in 2 years. And DL's delay is specifically in order to protect the pensions of its non-pilot personnel. UA took 3+ years to get through bankruptcy but didn't delay a minute in whacking from its employees. You do realize that DL pilots will make 15-20% more than UA pilots?

 

[Fly]

Notice how he only comments when he can add a UA 'dig'? I wouldn't expect to see him on here until this blows over.

 

[WorldTraveler]

"In 2003, United scuttled its lease on a Boeing 757 jet that was partly owned by Disney. As the airline was preparing last year to exit bankruptcy proceedings, it faced $5.1 billion in claims from Disney and other financiers of its aircraft. United eventually settled those claims for about $150 million."

Somehow I don't think DL's settlement will be substantially different from UA's.

Yawn.

Remember that these financiers will become owners of DL, just as they are of UA which goes to show that if they continue to see DL continuing its unprecedented turnaround while they watch UA falter, they could very well call DL and ask them to take over UA and preserve their investment in UA.

 

[Fly]

LMAO....yes, that's exactly what they must be planning.

You crack me up WT.

 

[magsau]

LMAO....yes, that's exactly what they must be planning.

You crack me up WT.

fly,

No wonder DL was last in OT with the reasoning that is shown here by those who claim to be in charge.

I suppose the explanation for the late flights could be something along the lines of "they are only tardy when compared to the scheduled departure time. flight time for the flight was concurrent with the schedule, blah blah blah"

 

[WorldTraveler]

spare us the drama, mags.

You and your cronies were part of grinding UA to a halt in 2000 and you get all worked up about some Delta Connection - not Delta - on-time statistics?

If you think I'm going to defend ASA's pathetic operation, think again. But let's also not forget how badly UA Express' operation has been at times - remember ACA? DL is dealing ASA and I'm quite frankly a little grateful the DOT spotlight is shining on them. And since they ground handle Comair in ATL, Comair is no better off than ASA. DL also has already addressed its scheduling at JFK - the incredible shrinking station for UA in the world's largest air travel market.

As much as you'd like to find some dirt to throw, this thread is about bankruptcy claims. Despite your hystrionics, DL will reduce its costs and emerge without ruining relations with all of its creditors and stakeholders the way UA did.

Once again, your primary concern should be turning UA around - before your former creditors/new owners have had enough, pull the plug, and sell the pieces off to those worthy of managing them - namely, Delta.

 

[Fly]

UA - $5 BILLION cash

DL - INSOLVENT

Yes, I'm sure DL is just about to put their purchase of United into the works.

 

[magsau]

Once again, your primary concern should be turning UA around - before your former creditors/new owners have had enough, pull the plug, and sell the pieces off to those worthy of managing them - namely, Delta.

WT,

Excellent post, tic.

If Delta is so worthy of managing their company and such brillant brains then why are they operating under CH11 of the BK code? It would seem that an airline with such talented mgmnt. would have been able to steer DAL away from the rocks of BK. In fact during the time UA was in BK one would suspect that DAL would have been able to take advantage of the situation and make hay while UA and others suffered. Instead your brillant team of leaders did nothing but blow through all operating cash, screw it retirees and pilots out of a pension. Yes, WT you have a stellar group of leaders over there. I am losing sleep worrying about what the talent at DL will be doing to the industry.....LOL

 

[WorldTraveler]

poor you. I have it when you get on this board all sleep deprived. Your slobber looks terribly unbecoming.

Fly,
I hate to break it to you, but every penny of UA's cash is borrowed and every asset serves as collateral on its obligations. The only difference between UA and DL is that DL still is formulating a plan, UA now has to live up to what they promised.

ps... when is UA's international seat upgrades going to be announced? Surely you aren't letting a bankrupt airline come up with a better product than UA has. Oh wait, DL's domestic product already is better than UA's and DL is now set to do the same thing in the international market.

 

[Bear96]

I just love these, "Neener neener neener, your airline's worse than mine," battles of wits. We need more of them here on USAviation.