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Delta to cede space at exclusive terminal in Boston
Thursday December 21, 2006
Delta Air Lines reached agreement with Massport, the airport authority for Boston Logan, to pay off construction debts related to the airport's rebuilt Terminal A, which was constructed exclusively for Delta but not used to the degree originally planned. According to The Boston Globe, DL will give up more than one-third of its 22 gates at the $500 million terminal, which opened in March 2005, leading to speculation about who will enter the new facility. AirTran Airways and Delta partners Continental Airlines and Northwest Airlines are candidates, but gate costs may be prohibitive.
The $497.8 million in bonds for Terminal A were sold through Massport, but Delta is obligated to repay them. Under the new agreement filed in US Bankruptcy Court on Dec. 15, DL would be absolved of that obligation. Any rent Massport collects from airlines and reserve funds will go toward repaying the bonds; the remainder will be covered by Ambac Assurance Corp., a Wall Street bond insurance company the airline hired to repay the bonds in the event of bankruptcy.
DL creditors have until Jan. 10 to file objections, with the court expected to rule on Jan. 18. The carrier originally planned to launch transatlantic service from the new terminal, but traffic downturns following the 9/11 attacks and Massport's unwillingness to construct customs facilities there forced it to cancel those plans.
Delta to cede space at exclusive terminal in Boston
Thursday December 21, 2006
Delta Air Lines reached agreement with Massport, the airport authority for Boston Logan, to pay off construction debts related to the airport's rebuilt Terminal A, which was constructed exclusively for Delta but not used to the degree originally planned. According to The Boston Globe, DL will give up more than one-third of its 22 gates at the $500 million terminal, which opened in March 2005, leading to speculation about who will enter the new facility. AirTran Airways and Delta partners Continental Airlines and Northwest Airlines are candidates, but gate costs may be prohibitive.
The $497.8 million in bonds for Terminal A were sold through Massport, but Delta is obligated to repay them. Under the new agreement filed in US Bankruptcy Court on Dec. 15, DL would be absolved of that obligation. Any rent Massport collects from airlines and reserve funds will go toward repaying the bonds; the remainder will be covered by Ambac Assurance Corp., a Wall Street bond insurance company the airline hired to repay the bonds in the event of bankruptcy.
DL creditors have until Jan. 10 to file objections, with the court expected to rule on Jan. 18. The carrier originally planned to launch transatlantic service from the new terminal, but traffic downturns following the 9/11 attacks and Massport's unwillingness to construct customs facilities there forced it to cancel those plans.
