Delta Air Lines Reports 4Q Loss of $2B

[chucky]

$6.2 billion loss by Delta really a gain in recovery

By Russell Grantham
The Atlanta Journal-Constitution

Published on: 02/15/07

Only in the upside-down world of bankruptcy court could a $6.2 billion annual net loss mean things are going well.

Delta Air Lines on Wednesday posted that eye-popping figure for 2006, along with a $2 billion deficit for the fourth quarter alone.

But as it has done throughout its flight through Chapter 11, the airline said the huge losses were largely a result of one-time restructuring charges rather than daily operations.

The bulk of those charges reflect the value of monetary claims Delta settled as part of its bankruptcy case, and thus serve as a measure of progress. Meanwhile, financial results that come from operating the airline now continue to improve, the airline said.

It touted a $58 million "operating profit" —- a measure that excludes all restructuring charges, as well as certain other expenses —- for last year, marking the first such profit since 2000.

"They've made a substantial improvement, and they're on track with their turnaround plan," said Standard & Poor's analyst Philip Baggaley, supporting the carrier's explanation.

story

 

[Gilding the Lily]

$6.2 billion loss by Delta really a gain in recovery

By Russell Grantham
The Atlanta Journal-Constitution

Published on: 02/15/07

Only in the upside-down world of bankruptcy court could a $6.2 billion annual net loss mean things are going well.

...

"They've made a substantial improvement, and they're on track with their turnaround plan," said Standard & Poor's analyst Philip Baggaley, supporting the carrier's explanation.

Every debtor tells its employees that this loss during BK is a signal that things are going well and efficiently. No one really knows until they see the detailed terms of the settlements or renegotiations. Presumably, the analyst has been following the BK and knows of the terms. But until you hear of the terms... you should take an article from Atlanta for what it is worth. From my limited perspective, things look like they are going as well as possible considering the circumstances.

 

[Gilding the Lily]

.