By most accounts, the nation's third-largest airline is emerging from court protection as a leaner carrier. It leaves bankruptcy with 6,000 fewer employees, less debt and a bigger focus on more profitable international flying, while ceding much of its short-haul domestic flying to regional carriers such as St. George-based SkyWest Inc.
"Yahoo!" said Michael Dunn, a Salt Lake City-based pilot. "I'm encouraged by everything I've read and seen. I'm relieved. I'm optimistic. I think Delta is well positioned to take advantage of the restructuring. We are leaner and meaner, and we did a lot in bankruptcy to prepare for coming out."
Atlanta-based Delta has added 60 international destinations, including seven from Salt Lake City, in an effort to balance out brutal competition from low-cost domestic carriers that hit hard after the Sept. 11, 2001, terrorist attacks.
Delta also reshuffled its fleet, slashed debt and saved almost $1 billion in labor costs after imposing pay cuts on front-line workers, negotiating wage-and-benefit concessions from pilots and terminating their pension program.
Despite the toll on employees, Delta's bankruptcy has worked to the advantage of its Salt Lake City International Airport hub. Although available seat miles - a measure of capacity - fell 16 percent in the year after the airline entered bankruptcy on Sept. 14, 2005, revenue from those seats jumped 21 percent.
Most of the revenue gains come from new routes. Delta now flies to 114 destinations from Salt Lake City, up from 87 in 2005. What's more, the airline now provides more than 6,000 local jobs, directly through its own payroll or indirectly through its regional Delta Connection partners, SkyWest Airlines and Atlantic Southeast Airlines.
"It was the fact that they needed to be more profitable. So they did what every good business should do and that was analyze the bottom line, and by so doing, Salt Lake City proved to be more beneficial to them and the decisions they made were more beneficial to us," said Lane Beattie, chief executive officer of the Salt Lake Chamber.
In the view of CEO Gerald Grinstein, "Delta is now a fierce competitor in a tough industry, and we are confident that we will reclaim our rightful place as an industry leader."
Grinstein, 74, is expected to retire from his post as soon as Delta's new board of directors chooses a successor. He is expected to fly to Salt Lake City today to meet with more than 1,000 employees and their families.
"It feels like [the end of] a long, difficult road. But in reality, it was short as far as airline bankruptcies are concerned," said Ed Thiel, a pilot and former head of the Salt Lake City-based unit of the Air Line Pilots Association who frequently was at loggerheads with Grinstein and other Delta executives.
"It's because Delta management did a better job than anybody else. They were willing to make deals and get the [restructuring] done, rather than have prolonged court battles," Thiel said.
Also Monday, Delta unveiled plans for a new paint pattern for its planes, featuring a three-dimensional red logo in motion across a blue background on the tail of its aircraft. The new logo will appear on more than 900 Delta and Delta Connection planes. The primary color of the logo is a solid red, instead of the familiar red-and-blue color scheme.
Delta's stock was canceled Monday. Shares of new stock will be issued to creditors and begin trading public on the New York Stock Exchange on Thursday. The company said 400 million shares will be issued under the ticker symbol DAL.
Grinstein's trip to Salt Lake City today will be a homecoming of sorts. He was CEO of Western Airlines when it merged with Delta in 1987. As part of the deal, Delta took over Western's Salt Lake City hub, and Grinstein took a seat on Delta's board of directors. He was named CEO of Delta in 2004.
Delta's board will immediately turn its attention to picking Grinstein's replacement. Top candidates include Ed Bastian, the carrier's chief financial officer, and Chief Operating Officer Jim Whitehurst.
pbeebe@sltrib.com
