Internal Memorandum
Date: October 28, 2004
To:
All Delta Employees
From:
Jerry Grinstein, Chief Executive Officer
Subject:
Progress Made on Delta’s Transformation
This week Delta has made significant strides in our determined march toward viability and our collective work to restructure Delta on our own, without court supervision. These include:
· A tentative agreement with ALPA to deliver $1 billion in long-term, annual savings. Delta pilots will have until November 11 to vote on the new contract. I greatly appreciate all the negotiators hard work and good faith efforts.
· A commitment letter with our long-time business partner, American Express, to provide up to $600 million in financing, subject to significant conditions.
· Agreement with some of Delta’s bondholders to defer approximately $135 million in debt due in 2005.
· A tentative agreement with PAFCA that has been submitted to its membership for ratification. Many thanks go to the PAFCA negotiating team who made extra efforts to reach a timely agreement.
· Concessions from certain vendors and lessors.
These developments will make a meaningful contribution to the massive company-wide effort under way to transform our airline, but make no mistake: due to Delta’s precarious financial situation, many uncertainties remain. The pilot agreement, which still is subject to ratification by the pilot membership, is one very important and necessary piece of a complex puzzle. But all of the pieces must come together in time to begin to reverse the impact of high costs, including unrelenting fuel prices, compounded by low revenues, and to stem our cash drain.
So while there are no guarantees, we are making good progress. The people of Delta are diligently and collaboratively making every effort to avoid bankruptcy while remaining focused on our customers. I am extremely grateful to all of you who are making enormous sacrifices to help our company restructure outside of bankruptcy.
As part of our out-of-court restructuring plans, in recognition of your contributions, we soon should be able to finalize our previously announced Employee Reward Program, through which Delta people would be able to share in any success their sacrifice helps make possible. The Employee Reward Program involves a combination of equity, in the form of a broad-based stock option plan, profit sharing and incentive performance payouts for all employees.
It remains in our collective best interest to restructure our company together, on our own, and we are working hard to do so. We have a sound business plan, our cost-cutting programs are on track, and our transformation plan is well under way.
Thank you for taking great care of our customers, and for keeping our operations safe and reliable.
Jerry Grinstein