Delta emerges from bankruptcy
Published: Tuesday, May 1, 2007 at 6:01 a.m.
Last Modified: Monday, April 30, 2007 at 11:46 p.m.
ATLANTA - Delta Air Lines Inc. waved farewell to bankruptcy protection Monday and put down a welcome mat for a redesigned logo after surviving a hostile takeover bid during a 19 1/2-month reorganization that saw it shed billions in costs.
The board of directors of the Atlanta-based company will now turn its attention to picking a new leader to replace outgoing Chief Executive Gerald Grinstein and deciding whether to sell or spin off regional feeder carrier Comair.
Grinstein, 74, said in an interview during a bankruptcy exit celebration at Delta's headquarters that he expects choosing a successor for him to be the first priority for the board. He said he believes the board, which consists of seven new members, will spend May getting acquainted with the candidates and make a decision sometime after that.
"That's the most important decision the board can make,'' said Grinstein, who will step down once his replacement is appointed.
The top internal candidates for CEO are Chief Financial Officer Ed Bastian and Chief Operating Officer James Whitehurst. Bastian said he will stay on with Delta even if he isn't picked as the new CEO. Whitehurst said he has chatted informally with some of the board members, but hasn't had an interview.
"The important thing is it be an internal person,'' Bastian said.
No external candidates have been mentioned.
As for Comair, which also emerged from bankruptcy Monday, senior Delta executives said there has been no timetable set on making a decision whether to shed it. Some analysts have suggested Delta will definitely sell Comair, and sell it quickly.
Whitehurst said "it's not a foregone conclusion'' that Comair will be sold.
Delta, the nation's third-largest carrier, also unveiled on Monday plans for a new paint job for its planes, featuring the company's three-dimensional red logo flying across a blue background on the tail of aircraft.
It will take four years to put the new livery on all Delta and Delta Connection planes, spokeswoman Chris Kelly said. Planes will get the new design as they come in for scheduled maintenance.
Delta entered Chapter 11 on Sept. 14, 2005, amid high fuel prices and the burdens of high labor and pension expenses. Delta significantly reduced its labor and pension costs while under court protection. As of March 31, the company had 52,260 full-time employees, according to a regulatory filing Friday. The figure includes subsidiary Comair.
The bankruptcy process has been expensive for Delta, which has run up more than $127.9 million in bills for fees and expenses for its lawyers, consultants and advisers through the end of January.
Delta underwent a lot of changes while in bankruptcy, which included cost and job cuts, restructuring its fleet and focusing more on international service. The airline terminated its pilots' defined benefit pension plan.
The carrier also defeated a hostile takeover bid by US Airways Group Inc. US Airways withdrew its $9.8 billion bid in January.
Delta's existing stock was canceled Monday. Shares of new stock will be issued to creditors and begin trading publicly on the New York Stock Exchange on Thursday under the ticker symbol DAL.
Reader comments posted to this article may be published in our print edition. All rights reserved. This copyrighted material may not be re-published without permission. Links are encouraged.
Comments are currently unavailable on this article