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August 9, 2005
Delta Air Lines, struggling to avoid Chapter 11, said on Tuesday it was trying to reduce the amount of money it needs to pay up front to secure a new credit card processor.
Delta told the US Securities and Exchange Commission it would delay a routine quarterly filing while it explored options to the full cash requirement, but noted it might not be successful.
"There can be no assurance whether or when it can implement any such alternative," the airline said.
Delta said it was negotiating with a third party to process its Visa/Mastercard charges, which is necessary to operate. The current contract expires on August 29.
The prospective processor is requiring that Delta deposit "a significant cash reserve" once the new contract begins, the airline said.
Delta would not identify the potential processor, its upfront cash demand or how much the carrier wants to shave from that requirement.
Separately, Merrill Lynch said in a research note on Tuesday that soaring oil prices could trigger a Delta bankruptcy filing in the next two months. Merrill cut its rating on Delta shares to "sell" from "neutral."
The airline has been battered, along with the rest of the industry, by skyrocketing oil prices, which set a record high of USD$64.27 per barrel on Tuesday.
Delta shares were also pressured by Monday's news that Todd Helvie, the airline's treasurer, has left the company a year after being promoted to the job.
(Reuters)
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