Deltas Big Loss

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Jun 10, 2003
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Delta's loss worse than expected
But airline making progress in cutting costs

Staff report
Published on: 07/19/04

Delta Air Lines posted a $312 million loss, excluding a large accounting write-off, in the second quarter ended June 30.

The loss, which equates to $2.55 a share, was wider than the $2.46 per share loss Wall Street expected, according to Delta.


DELTA TODAY

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CEO Gerald Grinstein said the carrier's latest loss points to the "urgent need for Delta to transform itself."

"The challenges we face are significant and all of our stakeholders must participate in the solution if we are to be successful," he said.

Delta's net loss for the quarter was $1.96 billion, or $15.79 a share. That includes $1.65 billion in non-cash write-offs mainly related to income tax credits the airline cannot claim while so deeply mired in red ink.

In the same period a year ago, Delta lost $237 million, excluding the effect of government aid and asset sales that allowed it to post a profit of $184 million.

The airline has been in a deep financial slump since mid-2001, and executives have said it may have to seek Chapter 11 bankruptcy protection if they cannot cut costs and reshape the carrier.

The silver linings in today's report were the company's cash balance and some progress in cost-cutting.

Delta said it ended the quarter with $2 billion in unrestricted cash. Most analysts think the carrier's cash balance would have to drop well below $2 billion before a Chapter 11 filing would become a serious possibility.

The airline also said it was able to arrange an extra $150 million in liquidity during the quarter by amending an existing financing deal.

Net unit costs rose 9.7 percent from 2003 but that comparison is skewed by government aid in the prior year and a pilot pension charge this year.

Excluding those items, unit costs fell 4.9 percent. And when higher fuel costs this year are factored out, unit costs were down 9.1 percent, Delta said.

Revenue in the quarter rose 13.3 percent to $3.96 billion, compared to a year ago.
 
Compared to the 2Q2003, DL only lost $75 MM more this quarter. That really isn't that bad just considering the price of fuel must have acounted for a large portion of that. Just my thoughts...........
 
coolflyingfool said:
Compared to the 2Q2003, DL only lost $75 MM more this quarter. That really isn't that bad......
It is when you consider most airlines are showing improvments over 2Q2003. :shock: