Delta Air CEO says current restructuring inadequate to avoid bankruptcy

07/28/05 - newratings.com

NEW YORK, July 28 (newratings.com) – Delta Air Lines’ (DAL) CEO, Gerald Grinstein, said that the company’s current restructuring plan is not adequate to save it from a possible bankruptcy and more needs to be done.

In a memo to the employees on Tuesday, Grinstein said that although the company’s ongoing transformation plan is delivering results, it is not enough. Delta Air Lines needs to cut costs further, given the rising fuel bills and the huge interest outgo on the company’s massive debt, Grinstein added. The company has been taking steps to cut costs and increase revenues by entering into wage cut agreements with its pilots and raising the ticket prices earlier this year. Delta Air Lines recently reported that it has been able to cut its losses in the second quarter from $1.97 billion in 2004 to $388 million in the current year. Delta Air Lines’ shares plunged over 12% on Wednesday after the memo was released.