A Delta bankruptcy not a hard hit for S.L.
City, passengers, workers unlikely to see difference
That hit will come because the department collects its landing fees and terminal rents — roughly equal to about $1.5 million a month — in arrears, or one month after the fact. To a bankruptcy court, that after-the-fact payment is just like a debt so it can be erased through the bankruptcy process.
While that may seem like a lot of money, it's a relatively minor blow to a department that will operate a $200 million budget this year and has healthy fund reserves.
As for a bankruptcy filing's effect on passengers, Salt Lake City fliers probably won't notice much difference, said airport department director Tim Campbell. "Operationally, I don't think the customer would see any difference," he said.
Two other major airlines that have filed for Chapter 11 recently — US Airways and United — have kept operating as they were before, even honoring frequent flier miles.
Even airline employees shouldn't feel much pain, at least initially, according to one local bankruptcy attorney.
However, some are warning that vendors providing services for the airline could be left holding the bag.
A bankruptcy would certainly not have the same effect on Salt Lake City as a pullout or if Delta decided to cut back on flights. Last year, the airline had the chance to cut service to Utah's capital but instead cut its hub in Dallas/Ft. Worth and expanded its Utah operation.
"They continue to expand here and add service," Campbell said. "Right now they are in a growth period for Salt Lake City and I would expect that to continue if they filed for bankruptcy."
For evidence that airport leaders aren't too concerned, passengers need look no further than the new $12 million terminal expansion project, which began this month. Some observers figure if airport leaders were really concerned about Delta they wouldn't be dumping millions into airport expansion.
There are two major types of business bankruptcy in the United States — Chapter 7, which is the equivalent of going out of business; and Chapter 11, the kind Delta is contemplating. Chapter 11 allows the company to reorganize its debt and potentially shed some financial obligations.
In Salt Lake City, Campbell figures a Chapter 11 would allow Delta to escape paying the airport one month's worth of landing fees and terminal rents.
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