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Thu, Dec 01, 2005 - Page 12 News List

Bankruptcy court allows Delta to sell some airliners


A US bankruptcy court judge approved Delta Air Lines Inc's request to sell some of its airplanes and to reject an Atlanta office lease.

Judge Prudence Carter Beatty said on Tuesday she would allow Delta to sell an undisclosed number of aircraft including include Boeing 737, Embraer 120 and Boeing 767 models. It was not evident whether Delta already has a buyer for the aircraft or how much it might get for them. No details were disclosed on the office lease.

The ruling came as Delta management and its pilots union prepared to present their cases in a fourth day of hearings devoted to Delta's motion to reject their contract, a move the airline it says it needs to successfully emerge from bankruptcy.

Tuesday's hearing also featured testimony form an industry specialist, Daniel Kasper, a managing director of LECG LLC, which provides expert testimonials.

Kasper testified for Delta that the bankrupt airline's financial woes were due to the emergence of low cost carriers, increased customer use of the Internet for buying low-price tickets and a reluctance among business travelers to buy high-cost tickets.

At the same time, he said, the airline has been saddled with high labor costs.

Delta wants to eliminate the pilot contract so it can cut labor costs, which the company says it needs to successfully emerge from bankruptcy.

"The industry has become commoditized. Price is the main driver," said Kasper, who previously served at the US Civil Aeronautics Board as director of international aviation.

Kasper was expected to continue yesterday, the fifth day of hearings focused on the pilots' contract.

Captain Lee Moak, chairman of the Delta Airline Pilots Association, questioned the validity of comparing Delta's financials to those of a low-cost carrier.

"At some point they have to decide what they want to be -- a low-cost carrier or a full-service international carrier," Moak said in an interview after court.

"They [Delta] want to have low-cost carrier costs on a full-service international carrier," he said.

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