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Delta Air Lines posts $330 million quarterly loss=20
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Tuesday October 15, 8:38 AM EDT=20
(Adds details, analyst comment, byline, changes dateline from ATLANTA)
By Kathy Fieweger
CHICAGO, Oct 15 (Reuters) - Delta Air Lines Inc. (DAL
<http://money.excite.com/jsp/qt/full.jsp?time=3D0&symbol_search_text=3DDA=
L>
), the No. 3 U.S. carrier, on Tuesday reported a third-quarter net loss
of $330 million as the U.S. airline industry remains mired in a historic
slump driven by lower revenues and decreased demand for air travel.
The airline also announced it will defer all deliveries of mainline
aircraft in 2003 and 2004 and ground all 15 of its MD-11 aircraft.
Twelve of those planes will be removed by the summer of 2003.
"Clearly, today's results are disappointing," Chairman and Chief
Executive Leo Mullin said in a statement. "Our industry is experiencing
unprecedented financial challenges."
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<http://ae.excite.com/adclick/CID=3D000002397d9372bc00000000/acc_random=3D=
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54669129/site=3Dexcite.reuters/area=3Dmoney.news/aamsz=3D336x280> =09
The third-quarter earnings release was the first by a major carrier,
many of which will report massive losses this week.
Delta's per-share loss was $2.67 on revenues of $3.42 billion, compared
with a net loss of $262 million or $2.13 per share on revenues of $3.40
billion in the year-ago third quarter. Excluding unusual items, the
airline reported a loss of $212 million or $1.75 per common share.
According to Thomson First Call, Delta was expected to report a loss of
$1.84 per share before extra items, with a range of a loss of $1.75 to
$1.95.
Jamie Baker, an airline analyst at JP Morgan, said the per-share loss
excluding items was largely in line with what the airline indicated a
few weeks ago. He said the aircraft deferrals were "more of the same"
phenomenon that has taken place all year.
After the Sept. 11, 2001, attacks, U.S. airlines cut capacity by about
20 percent, deferred planes and laid off nearly 100,000 workers. Losses
since then have been enormous, totaling about $10 billion in 2001, and
they also look to be huge in 2002.
JUST SAYING NO TO PLANES
Atlanta-based Delta said it worked with airplane manufacturer Boeing (BA
<http://money.excite.com/jsp/qt/full.jsp?time=3D0&symbol_search_text=3DBA=
> )
to defer delivery of the five Boeing aircraft it had scheduled for 2003
and another 24 scheduled for 2004.
These fleet changes will cut $1.3 billion in capital expenditures over
two years, Delta said.
Airline stocks have been battered all year and were particularly
pummeled in the third quarter, when the American Stock Exchange airline
index (XAL) fell 54 percent. Delta shares also fell 54 percent in the
quarter.
Delta said it had $1.7 billion in cash and cash equivalents at the end
of the quarter and it expected to meet financial obligations as they
come due.
In the third quarter, Delta's rival US Airways Group (UAWGQ
<http://money.excite.com/jsp/qt/full.jsp?time=3D0&symbol_search_text=3DUA=
WGQ
> ) filed for bankruptcy, and UAL Corp.'s (UAL
<http://money.excite.com/jsp/qt/full.jsp?time=3D0&symbol_search_text=3DUA=
L>
) United Airlines warned it might do so as well.
Delta said it had liquidity of $920 million available under existing
credit agreements, along with unencumbered aircraft worth about $5
billion.=20
=A92002 Reuters Limited.=20
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