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Bankruptcy
As early as 2004, in an effort to avoid bankruptcy, Delta announced a restructuring of the company that included job cuts and an aggressive expansion of Atlanta operations by some 100 new flights, making it a 'super-hub' and requiring the airline to spread its flight schedule more evenly across the day.[21]
On August 15, 2005, in an SEC filing, Delta announced that it had finalized a deal to sell Delta Connection carrier Atlantic Southeast Airlines (ASA) for $425 million in cash to SkyWest Airlines in an effort to obtain money to avoid bankruptcy. Analysts called the move a desperate one, estimating ASA's worth at around $700–$800 million – a price which SkyWest would not have been willing to pay.
On September 7, 2005, Delta announced that it would cut 26% of its flights at its Cincinnati hub and redeploy aircraft to its hubs in Atlanta and Salt Lake City.
Reorganization during bankruptcy
On September 22, 2005, Delta announced the acceleration of restructuring activities, targeting an additional $3 billion per year in cost reductions by 2007. $970 million of this amount was to come from debt relief, lease and facility savings, and previously commenced fleet modifications. Non-union workers' salaries were to be reduced by a minimum of 9% across the board, with a 15% reduction for executive officers and a 25% pay cut for CEO Gerald Grinstein. In December 2005, the Delta pilots agreed to an additional temporary 14% cut in pay, piggybacking onto the 32.5% taken at the beginning of 2005. This cut was made permanent with the ratification of an agreement in June 2006. Additionally, the company planned to lay off between 7,000 and 9,000 of its 52,000 employees.
In 2006, Delta purchased rights to fly between New York City and London from United Airlines.
On February 24, 2006, Delta, along with Continental Airlines and FedEx Express, saw future operations to Venezuela severely affected by President Hugo Chávez's decision to restrict flights coming into that South American country from the United States.[26][needs update]
Based on all of these new initiatives, Delta projected a return to profitability by late 2007, based on a crude oil price model of $66 per barrel, in contrast to other bankrupt carriers' restructuring modeled on $55 per barrel. Delta would eventually reach this goal of full year profitability in 2007.
Delta announced that coach travelers in the United States who have a flight longer than four hours will have on-demand programming on all those flights starting in 2007 at its main hubs in New York City, Salt Lake City, and Atlanta. This was to counter entertainment offerings of other airlines like JetBlue Airways, and take place of Song's service. Delta claimed to offer the leading in-flight entertainment system in the United States. Live programming and music are free, and movies will be available on demand for a nominal fee in coach and for free in first class. Delta also intends to install an improved in-flight entertainment system on internationally-configured aircraft, featuring a personal selection of movies. The system was installed in all classes on Boeing 767-400ER and 777-200ER aircraft, and in the BusinessElite section on Boeing 767-300ER aircraft.
On November 9, 2006, the airline announced that it would recall 1,000 flight attendants that were previously laid off. In addition to the flight attendant recall, Delta announced in late December 2006 that it had exhausted its pilot recall list and was now accepting pilot applications for the first time in 5 years. They expected to take on close to 200 first officers through 2007.
Emergence from bankruptcy
On April 25, 2007, the airline's bankruptcy plan was approved by the bankruptcy court. On April 30, 2007, Delta Air Lines emerged from bankruptcy protection as an independent carrier. Delta also unveiled a new logo, reminiscent of its logo from the 1970s and 1980s, and a new paint scheme. Delta's bankruptcy exit strategy was vastly different from that of United in that it expanded its way out of bankruptcy, rather than retrenching.
Delta's previous stock was canceled as of Monday, April 30, 2007, and new shares are trading on a "when issued" basis on the New York Stock Exchange. These shares began trading normally on Thursday, May 3, 2007. The starting price was around $20.00 a share, and went up to as high as $23.35. But investors showed little confidence in the stock as the price fell to $19.00 later in the week.
Upon exiting bankruptcy, Delta also announced a 50% increase in operations at Los Angeles International Airport, thus establishing Los Angeles as Delta's second West Coast hub and new potential Asian gateway with a total of 99 daily departures.
