Delta Air Lines is flying high again nine years after filing for bankruptcy, and it's finally paying off a chunk of a longtime debt it has owed to Chattanooga Airport.
The airline, under terms of its bankruptcy case settlement, had earlier agreed to issue stock to pay unsecured creditors such as the airport.
Atlanta-based Delta had owed the airport $65,000 when it sought bankruptcy protection nearly a decade ago, according to Lovell Field officials.
The shares are now worth $28,000 and will be transferred to the airport to repay a portion of the debt, officials said.
"We got 40 percent of the claim," said Airport Authority attorney Hugh Moore. "That's not bad for bankruptcy."
Authority member Lynda Griffin said that by the time the stock is sold, it could be worth even more.
"It'll be a positive," she said.
Moore said the stock account, managed by Fidelity Brokerage Services, was worth just $7,600 when it was issued by Delta in 2010.
The nation's airlines, including Delta, have seen growth this year due to an improving economy, industry consolidation benefits, rising travel demand and enhanced ancillary revenues.
According to Zacks Investment Research, current year earnings estimates for Delta shares have risen from $3.24 per share to $3.30. It rates Delta stock a "strong buy."
The Airport Authority agreed to open an investment account into which the shares will be placed. The funds will be sold and transferred to the airport's general operations, officials said.
Moore said Fidelity had suggested a more complex solution to the airport, which would have allowed the Authority to deal in options. But, the attorney said, the Fidelity offer involved "things the Authority doesn't need to do."
Moore said the airport wouldn't even typically have an investment account to hold stock.
"We did a lot of research about if the Authority can do this," he said.
Delta filed for bankruptcy protection in 2005 after losing more than $10 billion since 2001.
Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.