Delta Air Lines Reports 4Q Loss of $2B

[FA Mikey]

Delta Air Lines Inc., which is operating under bankruptcy protection, reported Wednesday a wider fourth-quarter loss of nearly $2 billion because of hefty restructuring items.

The Atlanta-based company said it lost $1.98 billion for the three months ending Dec. 31, compared to a loss of $1.24 billion a year ago.

Revenue rose 5.3 percent to $4.14 billion from $3.93 billion in the same period a year ago.

Excluding reorganization and other one-time items, the loss was $179 million.

Delta said its aircraft fuel costs fell 8.2 percent to $1.04 billion in the fourth quarter, compared to $1.13 billion a year earlier.

As of Dec. 31, Delta said it had $2.6 billion in unrestricted cash on hand.

Earlier Wednesday, Delta said it lost $1.84 billion in December alone.

The huge loss for the final month of 2006, which amounted to $9.34 a share, was reported in a bankruptcy court filing.

story here

 

[luv2fly]

Link

 

[chucky]

Delta posts big loss on paper, but cites progress

By RUSSELL GRANTHAM
The Atlanta Journal-Constitution

Published on: 02/14/07

Delta Air Lines, which has been reporting steady but shrinking losses as it edges toward exiting bankruptcy this spring, on Wednesday posted a $2.0 billion net loss in the last three months of 2006 as restructuring and bankruptcy-related charges pumped up the red ink.

The big loss capped a year in Chapter 11 in which the airline lost a total of $6.2 billion, including such charges.




But Delta said the huge deficits on paper obscured dramatic improvements in operations. Excluding the charges, Delta said it lost $179 million during the fourth quarter and $406 million for the full year, both down sharply from 2005 results.

The airline also said it had a $58 million "operating profit" — a measure that excludes business expenses such as depreciation and interest, as well as any restructuring charges — in 2006. That was the first such profit since 2000.

Delta also said it hit various other financial targets, including a $3 billion annual cost-cutting goal, ahead of schedule.

"A full year operating profit, and the magnitude of the progress it represents, marks a major milestone for Delta," CEO Gerald Grinstein said in a statement.

He said Delta remains on track for emerging from Chapter 11 this spring "as a strong, healthy and independent global competitor."

For the fourth quarter, Delta said revenue rose 5.9 percent despite a 3.6 percent cut in capacity.

The airline also said its available cash reserves were $2.6 billion as of Dec. 31, 2006, holding steady or slightly better from prior levels.

 

[StraaightTaalk]

How's the expansion strategy going?

 

[whatkindoffreshhell]

Certainly WT has an explanation.

DL is bleeding and the sharks are still circling.

Lotsa fees for the bankers/lawyers/consultants here.

The boys in ElkGrove are most assuredly interested.

 

[NYCDelta]

Certainly WT has an explanation.

DL is bleeding and the sharks are still circling.

Lotsa fees for the bankers/lawyers/consultants here.

The boys in ElkGrove are most assuredly interested.

The cost of BK is high. That's why it's better to avoid it altogether. If you look at UAL's net loss for the year ending 31DEC2005, it was a couple of billion. If we were already out of BK and still losing 2 billion-then I'd probably be worried.

 

[wings396]

The cost of BK is high. That's why it's better to avoid it altogether. If you look at UAL's net loss for the year ending 31DEC2005, it was a couple of billion. If we were already out of BK and still losing 2 billion-then I'd probably be worried.

Yes, UAL's was a couple of Billion for the entire year, not just one quarter. Either way, this is a Huge loss given all of the cost cutting measures that have already been taken. I hate to say it, but don't be suprised if the company comes looking to take a tad bit more out of the employees wallets. I thought that one round of concesions was enough myself when we gave at the office, but it wasn't. And sadly enough, that was with a union contract.

 

[BoeingBoy]

Bankruptcy accounting makes comparing financial results pretty much impossible, unless you're comparing similiar firms in similiar stages of bankruptcy.

Company's in BK usually report large losses while in BK then a large profit when they emerge, most of both non-cash.

Jim

 

[flyhigh]

I think noting the operating profit is most important. I haven't seen or heard any breakdown (domestic vs int'l etc.) to better understand what parts of the plan are working (i.e. int'l expansion or domestic product updrades). I think that would be most telling.

The huge loss is mostly bankruptcy related, probably due to extra work created to fight off the takeover. Lawyers aren't cheap!

The real issue to look for is when the next downturn comes along, who looks best. Even poorly run and managed airlines make money in good times. While we're not in the best times, it's proven to be a lot easier to make money these days than it has been in recent years. United has been making money as of late, but I'm not 100% convinced they are prepared for the next downturn. As for Delta, I think the next down turn will shed light on the int'l expansion that is hidden right now. Flights that are system profitable could quickly lose support and be cut.

 

[NYCDelta]

Yes, UAL's was a couple of Billion for the entire year, not just one quarter. Either way, this is a Huge loss given all of the cost cutting measures that have already been taken. I hate to say it, but don't be suprised if the company comes looking to take a tad bit more out of the employees wallets. I thought that one round of concesions was enough myself when we gave at the office, but it wasn't. And sadly enough, that was with a union contract.

I've mentally prepared for the worst. I certainly wouldn't be surprised to see more pay cuts. I think we've done well on the cost sideur costs are at or lower than most of our "peers". I think the problem lies with the revenue side:we're simply not making enough money. Either ticket prices need to come up a bit, or we need to find other means of revenue, i.e. more premium paxs, selling things on-board, etc.

...As for Delta, I think the next down turn will shed light on the int'l expansion that is hidden right now. Flights that are system profitable could quickly lose support and be cut.

I'll be the first to say that if there is another major terrorism event, and Int'l drops off sharply, then Delta is pretty much screwed. That's what happens when you want 60% of your revenue to be from Int'l.

 

[aquagreen73s]

I've mentally prepared for the worst. I certainly wouldn't be surprised to see more pay cuts. I think we've done well on the cost sideur costs are at or lower than most of our "peers". I think the problem lies with the revenue side:we're simply not making enough money. Either ticket prices need to come up a bit, or we need to find other means of revenue, i.e. more premium paxs, selling things on-board, etc.
I'll be the first to say that if there is another major terrorism event, and Int'l drops off sharply, then Delta is pretty much screwed. That's what happens when you want 60% of your revenue to be from Int'l.

I think you are dead on: the revenue has to come up for all in the industry and therein lays Parker's reasoning for going after DL. That surely would have sparked further consolidation and hence the needed capacity reductions industry wide. Having failed with plan A, which was probably the better of the two, I guess we're all headed for plan B which will be somebody going overboard and "taking one for the team" so to speak. One way or another, the industry will be right sized.

 

[luv2fly]

Yes, UAL's was a couple of Billion for the entire year, not just one quarter. Either way, this is a Huge loss given all of the cost cutting measures that have already been taken. I hate to say it, but don't be suprised if the company comes looking to take a tad bit more out of the employees wallets. I thought that one round of concesions was enough myself when we gave at the office, but it wasn't. And sadly enough, that was with a union contract.

If I am not mistaken, the majority of this quarterly loss was due to an attributable one time charge associated with the termnination of the pilots DB plan.

 

[brokenwrench]

You are correct. In the bizaro world of BK the larger the loss the better. The 6.5B loss is, to put it simply the amount of obligation DL has eliminated while in BK.

 

[delta777]

I think you are dead on: the revenue has to come up for all in the industry and therein lays Parker's reasoning for going after DL. That surely would have sparked further consolidation and hence the needed capacity reductions industry wide. Having failed with plan A, which was probably the better of the two, I guess we're all headed for plan B which will be somebody going overboard and "taking one for the team" so to speak. One way or another, the industry will be right sized.

I'm not so sure that a DAL/LCC merger, or for that matter ANY airline merger between U.S. carriers, would have reduced capacity. Hell, even Doogie himself said the Southwest/Air Trans' of the world would be there to pick up the slack from any service cuts. Therefore, one must ask, why consolidate on your end if the other players will eagerly fill the hole you left, which of course means no actual capacity was cut.

 

[Bear96]

Certainly WT has an explanation.

DL is bleeding and the sharks are still circling.

Lotsa fees for the bankers/lawyers/consultants here.

The boys in ElkGrove are most assuredly interested.

He's on yet another of his conveniently timed "vacations."