DALRC was formed in the fall of 2003 and an election was held to have representatives from various departments on the Board. We are actively collecting data on Delta, on retiree benefits, and on other airlines in similar situations, and making articles of interest available on our web site. Our primary audience is Delta employees, active and retired, and their families and survivors.
The airline industry is experiencing the worst financial crisis in its history. United Airlines and US Airways already have sought protection under Chapter 11 of the bankruptcy code. American Airlines narrowly escaped bankruptcy and is still in a vulnerable financial position. Many external and internal factors exist that could cause Delta to seek protection under bankruptcy.
If such a situation should occur, the court would oversee a financial restructuring plan that would be put forward by the company while management continues operating the airline. The court’s major goal in this process would be to see that Delta's costs are reduced to levels commensurate with projected income so that the airline will continue flying as a viable enterprise while simultaneously attempting to protect the economic interests of the company’s creditors.
Although the exact effect of the bankruptcy filing on employees, creditors and shareholders is unknown, you can expect there will be significant reductions in pay, quality of working conditions, and benefits of active employees. Some of the current retiree benefits also could be reduced or eliminated. Retirement benefits, medical benefits, retiree life insurance and travel benefits will be at risk.
Delta's major creditors will be represented aggressively during any bankruptcy process.
Modification of retiree benefits is under Section 1114. It could be prudent for retirees to have legal representation in Section 1114 proceedings.
Several thousand Delta retirees and active employees have determined it would be to our distinct advantage to have an organization in place to represent our interests if bankruptcy should occur. To facilitate this effort we have formed a nonprofit corporation, the DALRC, registered in the State of Georgia. DALRCwill continue to monitor the situation at Delta and keep abreast of developments that could possibility have an adverse affect on retirement benefits.
The effectiveness of DALRCwill be determined by the level of participation and support of the retirees, their survivors, and active employees. To defray start up costs, including incorporation, building a web site, and meeting space rental , we are asking for an initial contribution of at least $10. If bankruptcy were to occur at Delta, additional funds would be solicited to retain legal representation. None of the Board members of DALRCwill receive any compensation for their involvement in this effort beyond reimbursement of reasonable out-of-pocket expenses.
