chunk75
Well-Known Member
http://www.washingtonpost.com/wp-dyn/articles/A44725-2003Apr17.html
Delta Loss Widens, New Furloughs Set
Reuters
Thursday, April 17, 2003; 9:53 AM
By Julie MacIntosh
NEW YORK (Reuters) - Delta Air Lines posted the airline industry's biggest loss yet for the first quarter on Thursday, and said it will furlough 200 pilots as the sector grapples with a crippling downturn.
Atlanta-based Delta, the No. 3 U.S. air carrier, said it was facing "the greatest financial crisis" in its history, and said the war in Iraq had depressed travel demand further.
The airline reported a net loss of $466 million, or $3.81 a share, compared to a loss of $397 million, or $3.25 per share, a year earlier.
"Delta's first quarter results were weak, but in line with expectations," Lehman Brothers analyst Gary Chase said.
Northwest Airlines and Continental Airlines have already reported $617 million in combined losses this week, as the tepid economy, the war in Iraq, and the spread of Severe Acute Respiratory Syndrome (SARS) in Asia sacked business.
LOSSES ALREADY TOP $1 BILLION
Delta's results put the U.S. airline sector's net losses for the latest quarter well over the $1 billion mark.
But industry watchers say Delta, whose first-quarter revenue rose slightly to $3.2 billion from $3.1 billion, is better-prepared than most of its rivals to survive the industry's downward spiral.
"We continue to believe that the company is best positioned to weather the current downturn," Chase said. "Revenue was well ahead of our estimates."
Shares of Delta rose 39 cents, or 3.7 percent, to $10.88 in early trade on the New York Stock Exchange.
Before items, Delta reported a loss of $426 million, or $3.49 per share. Wall Street analysts had expected a loss of $3.51 per share, with estimates ranging from a loss of $3.16 to $3.95 per share, according to Thomson First Call.
Delta said lower travel demand caused by the war in Iraq will require it to furlough 200 pilots during April and May, in addition to an 18 percent cut in its total work force that began after Sept. 11, 2001.
Delta in February asked its pilots, its only major unionized group, to start talks on changes to their contracts that could save labor costs.
Industry leader American Airlines, owned by AMR Corp. narrowly avoided a massive bankruptcy filing on Wednesday after its flight attendants, the only group that had not ratified its part of a $1.8 billion concessions package aimed at saving the carrier, voted in favor of the cuts.
Delta's pilots are currently reviewing Delta's finances, and will present their findings to a group of pilot representatives within the next few weeks, a spokesman for the union said on Wednesday.
"Given that American was able to wring meaningful concessions outside of bankruptcy, Delta may have more leverage in the negotiations with its union," Chase said.
No official talks between pilots and the airline have begun, the spokesman said.
LIQUIDITY A STRONG POINT
The U.S. Department of Transportation approved in March a revised proposal from Delta, No. 4 carrier Northwest, and No. 5 Continental to sell seats on each others' flights and offer reciprocal frequent flyer perks. Such marketing agreements, or "codeshare" alliances, boost badly-needed revenue for the airlines involved.
Delta said it expects the marketing agreement to eventually yield an extra $150 million to $200 million per year in revenue.
Delta said it ended the quarter with $2.5 billion in cash and short-term liquidity, with unrestricted cash accounting for $1.9 billion of the total.
Many U.S. airlines are facing severe liquidity crises. Analysts look to a carrier's cash level for proof it can withstand unusual events that might hurt its results.
Delta said it was able to arrange for $900 million in incremental financing this month to replace facilities that will expire later this year. It also generated nearly $400 million in new aircraft-backed financing using enhanced equipment trust certificates (EETCs).
© 2003 Reuters
Delta Loss Widens, New Furloughs Set
Reuters
Thursday, April 17, 2003; 9:53 AM
By Julie MacIntosh
NEW YORK (Reuters) - Delta Air Lines posted the airline industry's biggest loss yet for the first quarter on Thursday, and said it will furlough 200 pilots as the sector grapples with a crippling downturn.
Atlanta-based Delta, the No. 3 U.S. air carrier, said it was facing "the greatest financial crisis" in its history, and said the war in Iraq had depressed travel demand further.
The airline reported a net loss of $466 million, or $3.81 a share, compared to a loss of $397 million, or $3.25 per share, a year earlier.
"Delta's first quarter results were weak, but in line with expectations," Lehman Brothers analyst Gary Chase said.
Northwest Airlines and Continental Airlines have already reported $617 million in combined losses this week, as the tepid economy, the war in Iraq, and the spread of Severe Acute Respiratory Syndrome (SARS) in Asia sacked business.
LOSSES ALREADY TOP $1 BILLION
Delta's results put the U.S. airline sector's net losses for the latest quarter well over the $1 billion mark.
But industry watchers say Delta, whose first-quarter revenue rose slightly to $3.2 billion from $3.1 billion, is better-prepared than most of its rivals to survive the industry's downward spiral.
"We continue to believe that the company is best positioned to weather the current downturn," Chase said. "Revenue was well ahead of our estimates."
Shares of Delta rose 39 cents, or 3.7 percent, to $10.88 in early trade on the New York Stock Exchange.
Before items, Delta reported a loss of $426 million, or $3.49 per share. Wall Street analysts had expected a loss of $3.51 per share, with estimates ranging from a loss of $3.16 to $3.95 per share, according to Thomson First Call.
Delta said lower travel demand caused by the war in Iraq will require it to furlough 200 pilots during April and May, in addition to an 18 percent cut in its total work force that began after Sept. 11, 2001.
Delta in February asked its pilots, its only major unionized group, to start talks on changes to their contracts that could save labor costs.
Industry leader American Airlines, owned by AMR Corp. narrowly avoided a massive bankruptcy filing on Wednesday after its flight attendants, the only group that had not ratified its part of a $1.8 billion concessions package aimed at saving the carrier, voted in favor of the cuts.
Delta's pilots are currently reviewing Delta's finances, and will present their findings to a group of pilot representatives within the next few weeks, a spokesman for the union said on Wednesday.
"Given that American was able to wring meaningful concessions outside of bankruptcy, Delta may have more leverage in the negotiations with its union," Chase said.
No official talks between pilots and the airline have begun, the spokesman said.
LIQUIDITY A STRONG POINT
The U.S. Department of Transportation approved in March a revised proposal from Delta, No. 4 carrier Northwest, and No. 5 Continental to sell seats on each others' flights and offer reciprocal frequent flyer perks. Such marketing agreements, or "codeshare" alliances, boost badly-needed revenue for the airlines involved.
Delta said it expects the marketing agreement to eventually yield an extra $150 million to $200 million per year in revenue.
Delta said it ended the quarter with $2.5 billion in cash and short-term liquidity, with unrestricted cash accounting for $1.9 billion of the total.
Many U.S. airlines are facing severe liquidity crises. Analysts look to a carrier's cash level for proof it can withstand unusual events that might hurt its results.
Delta said it was able to arrange for $900 million in incremental financing this month to replace facilities that will expire later this year. It also generated nearly $400 million in new aircraft-backed financing using enhanced equipment trust certificates (EETCs).
© 2003 Reuters
