Delta Air Lines's has sold off one of its regional carriers gives it some desperately needed cash.
Airline analyst Ray Neidl of Calyon Securities said Delta's $425 million sale of Atlantic Southeast Airlines to SkyWest is a good start, but more needs to be done.
The Atlanta-based airline, which has more than $20 billion in total debt and lease obligations, acknowledged as much in a filing with the Securities and Exchange Commission on Monday, shortly after it announced the ASA sale.
"Our preference has always been to avoid a restructuring under Chapter 11," Delta said. But, it warned there is "significant uncertainty" about whether it can raise enough additional cash to deal with an expected cash decline through the end of the year.
Delta, the third-largest carrier in the United States, said the proceeds of the ASA sale will be used for general corporate purposes and to pay down $100 million of debt under its loan agreement with GE Commercial Finance and other lenders.
The sale, subject to regulatory review, is expected to close in September.