Delta Flight Plan May Include Bankruptcy

October 25, 2004
Delta Air Lines is on its final approach to bankruptcy and is expected to touch down this week, which would bring the number of major air carriers in bankruptcy to three. Also in trouble: Independence Air, a Washington Dulles-based regional carrier.

Delta, the nation's third largest airline, is trying to win $1 billion in wage concessions from its pilots union but it may proceed with the bankruptcy filing even if the pilots cry "Roger, Uncle."

Delta faces a familiar set of problems: overcapacity, a bloated hub-and-spoke flight system, too much competition and sky-high fuel prices. But that's scant comfort to its employees, stockholders and frequent fliers.

Delta has been e-mailing its frequent fliers assuring them that their tickets, award miles and special privileges will all be honored, bankruptcy or not. In fact, only tickets are protected by law. If a carrier fails, other carriers must honor its tickets. The fate of frequent flier miles and other premiums is determined by the court.

Delta's employees have been less vocal about their situation than those at other troubled carriers, perhaps because Atlanta-based Delta is relatively free of unions. Only its pilots are unionized.

Also stuck in the bankruptcy holding pattern are US Airways and United Airlines. US Air filed last month for the second time in two years and United has been unable to pass Go for nearly two years.

Independence Air, meanwhile, burst out of the gate over the summer, shedding its role as United Express, a regional commuter carrier, and declaring its independence. Its 50-seat jets fly throughout the Eastern U.S. but most flights are less than half full at pushback.

Those familiar with its financial fuel burn rate say that Independence is headed for a rough landing by January. One problem: although its regional jets are where the airline business is going, many passengers consider them cramped and opt for a seat on a bigger plane.

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