Summary: Delta Air Lines Inc. Jul 05

Standard & Poors, July 2005

Abstract
Ratings on Atlanta, Ga.-based Delta Air Lines, the third-largest airline in the U.S., reflect a material near-term risk of default, due to heavy losses, declining cash reserves, and substantial debt and pension obligations. Delta, like other traditional, hub-and-spoke airlines ("legacy carriers") in the U.S., has incurred substantial losses due to rapidly increasing price competition from low-cost airlines in the U.S. domestic market and from escalating fuel prices since the second half of 2004. Delta's $382 million second-quarter 2005 net loss ($304 million net loss before various special items) contrasted with narrow profits or smaller net losses from operations by peer U.S. legacy carriers. Delta has made considerable progress reducing operating costs within its control (management states that it is on...

Companies mentioned in this report are: Delta Air Lines Inc.
Action: Review

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This product consists of a Summary Analysis: Bi-annual (at least). An abbreviated analysis containing Standard & Poor's issuer credit ratings as of the time the article was published. The analysis includes a rating rationale - the basis on which the rating was assigned - and an outlook section if the issuer is not on CreditWatch. Financial statistics are not included.

Delta Air Lines Inc.

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