NEW YORK – Delta Air Lines Inc. (DAL) said on Monday it is meeting with bankruptcy lawyers to prepare in case the carrier needs to file for bankruptcy protection, but added that recent talks with pilots make it hopeful a pilot agreement can be reached later this week.
Delta is struggling with rising jet fuel prices, high labor costs and expensive borrowing costs at the same time it is losing business to low-cost domestic carriers like Southwest Airlines Inc. (LUV). The nation's No. 3 air carrier has announced job cuts, tried to renegotiate debt and has been in concession talks with pilots for more than a year.
Chief Executive Officer Gerald Grinstein said he is hopeful the struggling airline can reach an agreement with its pilots by the end of the week on the issue of early pilot retirements. Grinstein was speaking at an airline alliance conference in New York.
The "tone of discussions" with pilots has made Grinstein believe that an agreement could be reached by that time, Delta spokesman Todd Clay told Reuters.
Delta shares jumped 26 cents, or 6.8 percent, to $4.08 in New York Stock Exchange (search) trading.
Still, the company is meeting with bankruptcy lawyers in case bankruptcy protection is needed, a spokesman told Reuters.
"We want to be prepared in the event we have to file," Delta spokesman Dan Lewis told Reuters. "We are doing what is prudent."