Atlanta (Sept. 17, 2004) -- Delta Air Lines said that its independent auditor has raised doubts about its financial viability and revised its annual report to include the possibility of a Chapter 11 bankruptcy.
In a filing this week with the Securities and Exchange Commission, Delta said that since it filed its annual report in March, "significant events have occurred that have materially adversely affected our financial condition and results of operations."
"These events include a further decrease in the domestic passenger mile yield and near-historically high levels of aircraft fuel prices," the company said. The filing also noted that Delta's independent auditor, Deloitte & Touche, has reissued its report "to raise substantial doubt about the company's ability to continue as a going concern."
"The company has suffered recurring losses, faces labor and liquidity issues, and may need to seek protection under Chapter 11 of the U.S. Bankruptcy Code in the near term. Such matters raise substantial doubt about the company’s ability to continue as a going concern," D&T wrote.
Delta had warned about the possibility of bankruptcy in a press release issued earlier this month. “As a result of the rapid deterioration of [our] financial condition due to low yields, high fuel prices, [our] uncompetitive labor costs, and [our] high debt burden, coupled with a possible operational disruption from anticipated pilot early retirements, bankruptcy is a real possibility. We’re working hard and fast to avoid it ... but if the pilot early retirement issue is not resolved before the end of the month, or if all of the pieces don’t come together in the near term, we will have to restructure through the courts,” the company said in a Sept. 8 statement.
-- WebCPA staff
