BACKGROUND

Delta Air Lines is a major United States airline headquartered in Atlanta, Georgia, in the United States. The airline's hub at Hartsfield-Jackson Atlanta International Airport is the world's busiest airport by passenger traffic (88 million passengers per year) and number of landings and takeoffs. Delta is the 3rd largest and the oldest airline still operating in the United States.
Between 2001 and 2005, Delta airlines lost $10 billion. The firm’s cash assets had significantly fallen short of its debt obligation, which stood at $14 billion. Standard and Poor’s (S&P) placed Delta’s debt ratings on “credit-watch” with negative implications, citing critical liquidity problems. The leaders of Delta Air Lines’ pilot union had alerted their members that the firm might have to file for bankruptcy protection under chapter 11 of the American Bankruptcy Code. In a bit to increase the liquidity, Delta sold its subsidiary (Atlantic Southwest Airlines) to SkyWest Airline for $425 million in August 2005. At the time of the sale, Delta was also experiencing a major operational crisis. As Delta was struggling to pull together its restructuring plan to survive, many analysts believed that the airline was under an increasing risk of bankruptcy.
However, Delta continue to grow throughout mergers and acquisitions as below:
- In 1972, it merged with Northeast Airlines
- In 1984, Delta expanded its reach in the domestic U.S market with its Delta Connection Program. Under this program, regional airlines could bring their passengers to Delta Hubs.
- In 1987, it merged with Western Airlines. With this merger, Delta become the 4th largest aviation company in the United States and the 5th largest in the world, I terms of revenue.
- In 1991, Delta became a global airline by purchasing many transatlantic routes from Pan American World Airways.

The primary purpose of