=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2004/07/22/f= inancial1337EDT0185.DTL --------------------------------------------------------------------- Thursday, July 22, 2004 (AP) Ailing Delta delaying delivery of more aircraft to cut expenses HARRY R. WEBER, AP Business Writer (07-22) 10:37 PDT ATLANTA (AP) -- Delta Air Lines Inc. said Thursday it is delaying the delivery of 10 aircraft and canceling its option to buy 113 Boeing Co. planes through 2007 as the struggling carrier looks for ways to cut costs to avoid bankruptcy. The decision by the Atlanta-based carrier is in addition to its plans announced in October 2003 to sell 11 Boeing 737-800 aircraft that had been scheduled for delivery to the airline in 2005. Chief financial officer Mike Palumbo said the moves are key to Delta's "goal to rebuild the balance sheet while improving cash flow." Delta expects to be able to reduce capital spending requirements by nearly $1 billion over the next two years. Delta plans to defer two Boeing 777 deliveries, originally scheduled for 2005, until 2008. Delta had said in February that it would sell those planes, but now is delaying delivery instead. The airline also said it is deferring delivery of three Boeing 777s, originally scheduled for 2006, until 2009 and five Boeing 737-800s, originally scheduled for 2006, until 2007. Delta said that in addition, it will delay delivery until 2007 of eight Boeing 737-800s. That is a year earlier than it had planned in an announcement last year. Delta also said it has agreed to cancel all of its current option rights to purchase Boeing 777 and 737-800 aircraft for 2005 through 2007, and has agreed to terminate all of its option and rolling option rights to purchase Boeing 757 aircraft. The options being canceled total 113 aircraft, spokeswoman Peggy Estes said. Delta currently has 842 total aircraft, 550 of which are part of its mainline operations, Estes said. Ray Neidl, an analyst with Blaylock & Partners in New York, said the mov= es are not a surprise given Delta's financial situation. "You can't grow if you're losing money," Neidl said. "You can always replace those options at a later date. Right now, you have to plan conservatively. They just don't have the cash, the borrowing power, to justify investing in new aircraft." Delta, the nation's third-largest airline behind United and American, reported Monday a nearly $2 billion loss in the second quarter -- its largest ever in a three-month period. In addition to restructuring its fleet, the company is seeking deep wage cuts from its pilots. Shares of Delta were up 6 cents at $5.55 in afternoon trading on the New York Stock Exchange. On the Net: www.delta.com ---------------------------------------------------------------------- Copyright 2004 AP