Food supplier to Delta cuts off service to flights

Disruption tied to contract fight with Gate Gourmet

September 22, 2004|By COX NEWS SERVICE

ATLANTA - Delta Air Lines scrambled to get food and drinks aboard many of its flights late yesterday after its primary supplier stopped service in a contract dispute.

The food and drink supplier, Gate Gourmet, shut down service to Delta yesterday afternoon, only days after the ailing airline resolved a similar dispute with another catering company.

"It's going to impact many ... flights," Delta spokesman John Kennedy said. He declined to describe the nature of the dispute with Gate Gourmet, but said the Atlanta-based airline - struggling to avoid bankruptcy - was taking steps to resolve the matter.

A bankruptcy expert suggested that some Delta suppliers might be demanding prepayment for services to avoid the risk of losing money on outstanding bills if Delta files for Chapter 11 protection from creditors in coming weeks.

"It's good bankruptcy planning," said Darryl Laddin, an Atlanta attorney who represented Eastern Airlines' bankruptcy trustee about 15 years ago.

Gate Gourmet provides food and drinks for flights at Delta's giant Atlanta hub and in about 50 other cities. The company, owned since 2003 by the investment firm Texas Pacific Group, didn't respond to calls for comment.

"While Delta regrets any inconvenience to our customers, we are attempting to resolve the matter," Kennedy said. He declined to say how much notice Gate Gourmet was required to give before terminating service.

Kennedy said Delta gave vouchers to some passengers to buy meals before flights, and turned to other vendors to provide meals, drinks or snacks on other flights.

Kennedy declined to say how many Delta flights operated yesterday without the usual beverage, snack or meal service, but he acknowledged the effect was widespread.

Delta's latest headache came a day after a rare bit of good news. On Monday, leaders of Delta's pilots union agreed to a plan to resolve staffing problems that could arise from an exodus of retiring pilots at the end of the month. Delta had said that could trigger a Chapter 11 filing.

The agreement with the pilots must be approved by union members. Yesterday, John Malone, chairman of the union's leadership council, issued a letter urging the pilots to vote in favor of the deal.

Delta faced a similar dispute last week with the industry's largest caterer, LSG Sky Chefs, which stocks flights at the airline's Salt Lake City hub and about 20 other cities. That dispute was resolved in a couple of days.

LSG Sky Chefs and Gate Gourmet account for about half of the airline food business.

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