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Delta Moving Closer to Bankruptcy

In a filing yesterday, Delta said that its prospects for filing bankruptcy are increasing, as the company burned through $744 million in cash in the first six months of the year. The carrier continues to seek $1 billion in concessions from pilots, who have offered $705 million in cuts. Worse, at this burn rate the airline will be left with about $1.2 billion in cash at the end of the year (roughly the equivalent to you or I having about $72 in our bank account).

Remember, of course, that bankruptcy does not mean that Delta is going out of business. Several carriers have restructured and re-emerged as successful airlines (Continental, America West, TWA. Oh wait, not TWA).

One other thing in the filing: Former CFO Michele Burns has struck an agreement with Delta to provide consulting services to the company through 2009 in exchange for free airfare for life. Not a bad deal (though, interestingly, because the airfare is compensation, Burns must pay income taxes on the flights. Basically, she’ll get flights for about 70% off).

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