Delta Air Lines Heads for Bankruptcy Protection

Shares of Delta Air Lines Inc. tumbled for a time last month after the nation’s third-largest carrier warned it will record a substantial loss for the rest of the year and will need to file for bankruptcy if its cash reserves fall too low, or lenders seek immediate payment of its debts.

Delta said in a Securities and Exchange Commission filing that it continues to face significant challenges because of historically high fuel prices and low ticket fares.

“Accordingly, we believe that we will record a substantial net loss for the nine months ending Dec. 31, and that our cash flows from operations will not be sufficient to meet all of our liquidity needs for that period,” the filing said.

The filing “underscores the fact that it’s unlikely that the company can restructure without a Chapter 11 filing,” said analyst Helane Becker of Benchmark Co. in New York.

Delta, which reported a nearly $1.1 billion loss in the first quarter, had $1.8 billion in unrestricted cash at the end of March.

But in the filing, Delta said it expects its cash level will be substantially lower by the end of the year if it can’t increase revenue, cut more costs, sell assets or restructure debt.

Some analysts have speculated that Delta will sell its feeder carriers, Comair Inc. and Atlantic Southeast Airlines. The company did not specify its plans in the filing.