Hit by high fuel costs and bruising fare competition, Delta Air Lines today warned that it will have a substantial loss for the last nine months of the year and warned it may have to file for bankruptcy if conditions worsen.
In its quarterly Securities Exchange Commission filing, Delta said it will have to seek bankruptcy protection if its cash reserves fall too low or if any of its creditors call its loans and demand immediate payment.
"We believe that we will record a substantial net loss for the nine months ending Dec. 31 and that our cash flows from operations will not be sufficient to meet all of our liquidity needs for that period," the nation's third-largest airline said it the filing.
Delta had a $1.1 billion loss in the first quarter, and the latest filing held out little hope for improvement for the next three quarters.
The airline said it may have to sell assets or seek additional cost cuts but warned that these tactics may not be enough to avoid a bankruptcy filing.
"We cannot assure you that the anticipated benefits of our transformation plan will be achieved or that these benefits, if achieved, will be adequate for us to maintain financial viability," Delta wrote in the SEC filing.
In all, Delta has $14.1 billion in debt.
