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October 28, 2004
Delta in Deal with Pilots, Averting Chapter 11
Delta Air Lines reached a tentative agreement with its pilots’
union last night on wage and benefit cuts, averting a bankruptcy filing,
the New York Times reported. Agreement came after an
intense day of negotiations, during which Delta made its final offer in
its bid for $1 billion in contract concessions. Leaders of the Air Line
Pilots Association, which represents Delta’s 6,900 pilots, must
approve the deal before ratification can begin. The union said the
council was reviewing the agreement last night.
First Enron Fraud Trial Nears End
In closing arguments in the first criminal trial to emerge from
Enron’s 2001 collapse, prosecutor Kathryn Ruemmler told jurors
Wednesday that they have seen “how one of the most powerful
investment banks in the world helped Enron cook its books,” the
Associated Press reported. The defendants are accused of helping push
through Enron’s year-end 1999 sale of interest in the barges so
the energy company could book a $12 million pretax profit the company
needed to meet earnings targets.
Victims Group Denied Role in Diocese Case in Tucson
A federal bankruptcy judge denied a request on Monday to allow a
national advocacy group for victims of clergy abuse to represent future
claimants against the Roman Catholic Diocese of Tucson, the
Arizona Republic reported. Bankruptcy Judge James Marlar
held a hearing on Monday to discuss the appointment of lawyers to
represent various present and potential claimants in the diocese”s
bankruptcy reorganization. The judge set a hearing for next week to
settle the appointment of lawyers on behalf of those currently
identified victims, minors who were victimized and future, still unknown
claimants.
Independence Air Aims to Avoid Bankruptcy
Independence Air said it will overhaul its ticket distribution
system, cut capacity in some markets and negotiate with lenders in order
to preserve cash necessary to avoid bankruptcy, the Associated Press
reported. The U.S. airline’s parent company, FLYi Inc., announced
third-quarter losses on Wednesday of $83 million, or $1.82 a share. A
year ago the carrier, then known as Atlantic Coast Airlines, turned a
$23 million third-quarter profit. It operated at the time as a regional
carrier for UAL Corp.’s United Airlines and Delta Air Lines Inc.,
the newswire reported.
Discount Airlines’ Position Weakens
America West Holdings Corp. and AirTran Holdings Inc. reported
wider-than-expected third-quarter losses, while ATA Holdings Corp.
revealed in its bankruptcy filing a weaker financial position than
previously disclosed, as tough industry conditions increasingly hinder
the nation’s discount airlines, the Wall Street
Journal reported. Pummeled by high fuel costs, overcapacity and
weak revenue, most of the nation’s airlines have posted big losses
for the third quarter. Read the full article at
href='http://www.wsj.com/'>www.wsj.com (subscription required).
Ormet Says Judge Rejects Union Request
A bankruptcy court has rejected a US Steelworkers’ bid to
dismiss privately held Ormet Corp.’s motion to reject certain
bargaining agreements with labor unions, the company said on Wednesday,
Reuters reported. Ormet, an aluminum producer, is seeking to reject
certain collective bargaining agreements with the USWA at its Hannibal
rolling mill and reduction plant. A bankruptcy court overseeing its
chapter 11 case has entered an order denying a request by the United
Steelworkers of America to dismiss the Ormet motion, the company
said.
S&P Cuts ATA Holdings to Default Status
Standard & Poor’s on Wednesday cut ATA Holdings
Corp.’ corporate credit rating to default status, a day after the
airline holding company filed to reorganize in bankruptcy, Reuters
reported. S&P cut the company’s debt ratings on Wednesday to
“D,” from the “CCC-minus.” S&P also affirmed
the top “AAA” rating on an insured, secured bond known as an
“enhanced equipment trust certificate.”
AirTran CEO Sees Another Airline Liquidating Soon
The U.S. airline industry, riddled with excess supply, will see a
significant drop in capacity, or far fewer seats, as a result of at
least one airline liquidating in the next year, AirTran Airways CEO Joe
Leonard told Reuters in an interview. “With oil at $55 a barrel,
the airline industry is unsustainable with today’s amount of
capacity,” Leonard said. “It’s inevitable there will
be some liquidation by the end of next year, for certain,” he
said, the newswire reported.