Delta Air Lines Receives Court Approval for Aircraft Lease Transactions to Result in Approximately $200 Million of Annual Cost Savings
Wednesday February 15, 3:44 pm ET
ATLANTA, Feb. 15, 2006 (PRIMEZONE) -- Delta Air Lines, Inc. today announced that the U.S. Bankruptcy Court for the Southern District of New York has granted approval for certain aircraft lease transactions that will result in approximately $200 million of annual savings for Delta compared with its existing rent and debt service obligations for those aircraft.
Edward H. Bastian, Executive Vice President and Chief Financial Officer of Delta, said: ``Less than six months after filing for reorganization under Chapter 11, we have already made significant progress in our effort to achieve substantial annual cost reductions from the renegotiation or rejection of aircraft leases. Restructuring plans for over 90% of our mainline fleet and over a third of our regional jets have now been agreed to or otherwise implemented with aircraft financing parties.''
He continued, ``The cost reductions resulting from these transactions are a critical element in our business plan, which calls for $3 billion in annual revenue and cost benefits. At the time of our Chapter 11 filing, we had targeted fleet savings of approximately $450 million. With the court approval received today, the Company is well on its way to achieving that objective. We are also on track to achieve our goal of eliminating four aircraft types from our fleet by the end of 2006.''
The transactions approved by Judge Adlai S. Hardin today, negotiated with a group of aircraft creditors, will restructure the financing arrangements for 88 aircraft in Delta's mainline fleet. Closing of the transactions is subject to the completion of definitive documentation.
``We are very pleased that the parties involved in these negotiations were able to arrive at a consensual agreement on such a large group of aircraft so quickly,'' Bastian said. ``This agreement is an important milestone for Delta and a key cornerstone of our aircraft lease renegotiation efforts.''
