Delta's Chapter 11 Reinvention

Among airlines, Delta (DALRQ) seems to have broken the mold when it comes to bankruptcy filings.

That's because rather than just focusing on cutting expenses, Delta has made aggressive moves to reinvent itself outright since it filed for Chapter 11 bankruptcy protection in September 2005.

"Delta is no longer a large regional airline -- it is a large international airline," Chief Executive Gerald Grinstein said last week as the carrier introduced nine new international flights.

The latest flights build on the 50 new international routes it has added or announced since the summer of 2005.

During that time, Delta's international revenue has grown from 20% to 35% of its total, and the carrier has an eventual target of 50%.

In nearly every other airline bankruptcy dating back to the first Continental filing in 1983, the overriding intent has been to reduce costs, primarily the amount of money spent on labor. Any other purpose, aside from facilitating a merger or asset sale, has seemed to be a distant second in importance.

The failed 1989 Eastern bankruptcy focused on labor costs, and on flying through a strike. Pan Am's 1991 bankruptcy was viewed as a way to reduce costs and then to sell assets in order to save jobs.

It was only partially successful: Delta bought its European routes, but at the 11th hour backed away from funding a new Miami-based Pan Am focused on Latin America.