Delta Air Lines Inc. said it plans to seek concessions from lenders to avoid a debt default stemming from the coronavirus pandemic’s impact on air travel, WSJ Pro Bankruptcy reported. The Atlanta-based carrier said yesterday that by early next year it expects to be out of compliance with certain credit requirements due to the plunge in demand for passenger flights. Certain of Delta’s loans also include collateral requirements tied to the value of aircraft fleet and other assets. Delta said that it would seek to renegotiate terms with its lenders and expects to obtain amendments, but acknowledged it could end up in debt default if such discussions aren’t successful. Lenders and bondholders after a default could demand immediate repayment and potentially repossess collateral, Delta said. Delta carried a total debt load of almost $16 billion as of the end of March. At the time, the company had $6 billion of cash and cash equivalents on its balance sheet. The company yesterday said that it expects revenue in the second quarter to decline 90 percent year-over-year, with capacity down 85 percent compared with last year’s level due to demand disruptions from the pandemic.
