Continental Ex-CEO On Delta: 'Business is Back'
Airline "business is back," says Savoy Capital Chairman Frank Lorenzo, the former CEO of Continental Airlines. As Delta Air Lines emerged from bankruptcy on Monday, Lorenzo -- who led Continental through its own Chapter 11 ordeal -- joined "Closing Bell" to offer insights on Delta's trials and what likely lies ahead.
Lorenzo told CNBC's Maria Bartiromo that "tomorrow, Delta's offices will be very different": The Atlanta-based carrier's operations will continue "relatively unchanged," but the endless parade of "lawyers, courtrooms and extreme public relations needs" -- will be over.
He believes Delta can thrive, citing a "far better environment" than when Delta filed for bankruptcy protection in Sept. 2005. Lorenzo pointed to "strong demand and weak supply," and airlines' ability to raise prices. But he cautioned that so-called major legacy carriers need to be competitive with "the JetBlues, the AirTrans" and other discount airlines.
Lorenzo addressed another challenge: the hostile takeover bid for Delta by US Airways Group, which was withdrawn in January. He said that Delta "has critical mass" and doesn't need to merge or sell out to survive. And, he added, "The press is much more enamored with airline mergers than airline managers are -- or should be."
Delta's existing stock and bankruptcy-era ticker, DALRQ, were canceled Monday. On Thursday, shares of the company's new stock will be issued to creditors, and begin trading publicly on the New York Stock Exchange, under the ticker symbol DAL.