Delta Air Lines, Inc. (“Delta” or the “Company”) is one of the world’s largest airlines in terms of passengers carried. Delta provides scheduled air transportation for passengers and cargo throughout the United States and around the world, serving over 300 worldwide destinations in more than 50 countries.
Blackstone’s Financial Advisory group provided Delta with a runway for recovery and growth. Facing significant challenges related to its cost structure, capital structure and fleet configuration, as well as high fuel costs and reduced air travel demand, Delta retained Blackstone as its financial advisor in connection with its Chapter 11 filing.
Blackstone worked with Delta to develop a long-term business plan and engineer a dramatic operating transformation. The comprehensive plan involved eliminating unprofitable routes and aircraft, improving revenue through better utilization of remaining aircraft, reducing expenses, addressing pension obligations and restructuring debt. In addition, Blackstone helped formulate and negotiate proposals to Delta’s pilots’ union and unsecured creditors, and was integrally involved in structuring a settlement with the Pension Benefit Guaranty Corporation regarding the pilots’ pension plan. In the midst of these efforts, Blackstone also helped to defend Delta against an unsolicited takeover attempt by US Airways. Finally, Blackstone helped the carrier raise $5.3 billion of capital to operate during bankruptcy and following its exit from Chapter 11.
In April 2007, Delta emerged from Chapter 11 as a transformed airline with a strong position in its market. Delivering on its strategic plan, Delta improved its annualized operating cash flow run rate by approximately $3 billion, while eliminating more than $9 billion in debt and lease obligations. Delta’s accomplishments also were recognized by the market —its equity market value upon exiting Chapter 11 was over $4 billion—the largest ever for a company emerging from bankruptcy.