Manufacturing Industry
American Express to provide Delta Air Lines with USD600m in financing
Airline Industry Information, Oct 26, 2004
AIRLINE INDUSTRY INFORMATION-(C)1997-2004 M2 COMMUNICATIONS LTD
Finance company American Express has agreed a USD600m financing deal with Delta Air Lines which is dependent on the airline's pilots agreeing to a USD1bn concessions deal.
The deal is made up of USD100m in loans and USD500m in prepayments on the airline's frequent flyer scheme SkyMiles. There is no time limit on Delta Air Lines to receive the USD100m loan but American Express Travel Related Services, with whom the deal was struck, will split its USD500m payment in two, the first being made after the deal's conditions are met and the second payable up to 90 days later.
Delta Air Lines has warned that if concessions deals are not struck with its workers very soon it will have no choice but to file for bankruptcy. In a filing to the US financial authorities on 25 October 2004 it said in the wake of the new deal that if it does file for Chapter 11 protection that American Express should be put at the top of the creditors list, reports The Associated Press.
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