Delta Air Lines Inc. took its campaign against a hostile takeover bid to the Georgia statehouse Tuesday, warning state lawmakers a takeover by US Airways could result in thousands of lost jobs and threaten Atlanta’s economy.
“There has never been a hostile takeover of an airline by another in this country, and it’s not about to start here,” Delta chief executive Gerald Grinstein told lawmakers at a meeting called to discuss the airline’s future.
The remarks came as the Atlanta-based airline released its plans to emerge from Chapter 11 bankruptcy protection as a stand-alone company, another sign of the company’s fierce resistance to the takeover bid disclosed by Tempe, Ariz.-based US Airways Group Inc. in November.
Grinstein and Ed Bastian, Delta’s chief financial officer, said the combined company would be saddled with $23 billion in debt and would be forced to cut some 10,000 jobs.
Delta has tried to take the fate of the potential takeover beyond the boardroom and into the hearts and minds of Atlanta’s public by organizing protests that have drawn thousands of Delta employees and rallying influential decision makers to its cause.
Tuesday’s legislative meeting was a prime example of one of those pep rallies, as one official after another spoke of Delta’s $14 billion economic impact on the state and about its charitable history.
The airline is credited with helping to transform Atlanta’s airport into the world’s busiest and the city itself into an economic engine of the Southeast. But it was sent reeling after the Sept. 11 terror attacks and filed for Chapter 11 bankruptcy protection in 2005, a year the company reported a $2 billion loss.
Bastian said the company has rebounded since then, and that the airline expects to narrow its 2006 losses to $350 million and could turn a modest $450 million profit next year.
The Georgia Legislature has sought to bolster Delta with tax incentives, agreeing in 2005 to put a $13 million annual limit on what airlines must pay in state and local fuel taxes. The plan is set to expire in July.
Mark Burkhalter, the House’s second-ranking Republican, said he will push to make the cap on fuel taxes permanent. He also said he will revive a proposal that would give Delta a chance to recapture $28 million in lost tax breaks.
After all, he said, losing Delta would amount to a “consumer tax increase in airfare.”