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It was party time at Atlanta, the world”s busiest airport, as Delta Air Lines emerged from 19 months of trading in insolvency. ”It”s been quite an experience,” said Delta CEO, Gerald Grinstein (pictured). ”We have come out of a pretty awkward situation bolder, stronger and a truly international airline.”
The airline entertained some 2,000 of its 47,000 staff to a typical American cheer session in one of its massive hangars at the airport, while live links were made to London and Santiago, major destinations for the carrier. ”I fundamentally, honestly believe that Delta is a special place. It”s more than an airline; it”s an institution,” he said as one ovation followed another.
Grinstein (74) takes full credit for turning around a moribund company with a long and successful history but which had fallen on hard times. A lawyer by profession, he comes from a city long associated with air transport, Seattle. ”The last 18 months have been challenging and Delta people rose to the challenge,” he said. The airline was able to announce an operating profit of $155m for the last, traditionally weak, quarter. It has a cash balance of $4bn and the profit forecast is for $800m for the full year.
Delta”s reorganisation has clearly been a fundamental transformation of its business, not simply a restructuring of the balance sheet like many Chapter 11 cases. In September 2005, Delta introduced a comprehensive plan to achieve $3bn in annual financial improvements by the end of 2007, on top of approximately $5bn in improvements under way since 2002.
During the reorganisation process, Delta employees worked hard and succeeded in transforming the airline into a strong, financially viable company, whilst improving the customer experience on the ground and in the air. Aircraft types have been reduced from 12 to four. Song has come and gone, its Boeing 757s transformed into comfortable transcontinental 154-seat two-class aircraft.
Grinstein added that a concentration of efforts on international routes was a major contributory factor to the turnaround. Traditionally only 20% of the airline”s business has been overseas. The figure is now 40% and could reach a 50/50 balance. By the year-end Delta plans to serve 37 transatlantic destinations.
Delta confirmed that the new British Contour seats would be introduced for new 777LRs early in 2008. It planned to install the flat bed system on all its international long haul services by 2010. It would be the first time that the seat would have been fitted on a 767.