Delta Air sees negative Q1 cash flow on war fears NEW YORK (Reuters) =97 Delta Air Lines, the No. 3 U.S. airline, said Monday= =20 it expects cash flow from operations to be negative this quarter, saying=20 war fears are convincing some travelers not to fly. The Atlanta-based=20 airline also said it now expects overall capacity, or available seat miles,= =20 to fall this quarter, after earlier projecting a rise. "Current=20 geopolitical uncertainties have weakened the already depressed revenue=20 environment more than initially expected," said Chief Financial Officer M.= =20 Michele Burns in a press statement. "Bookings for the quarter are down and= =20 we expect this to continue." Delta in January had projected "slightly positive" cash flow this quarter=20 and a 0.5 % to 1 % rise in capacity. It now expects capacity to drop 1.5 %= =20 drop. The airline lost $363 million last quarter and is asking its pilots=20 for concessions. Chief Executive Leo Mullin last month said he believed the= =20 airline can cut costs without seeking bankruptcy protection, like UAL=20 Corp.'s United Airlines and U.S. Airways. Richard Bittenbender, senior=20 credit officer in airlines for credit rating agency Moody's Investors=20 Service, said: "Delta faces the same challenges that all major U.S.=20 hub-and-spoke carriers are facing =97 a lack of demand caused by the economy= =20 and political uncertainty. This results in very weak prices and costs that= =20 are in excess of revenues." Delta spokeswoman Peggy Estes said the airline, which runs 5,619 flights a= =20 day in 78 countries, is using smaller jets and cutting flights, but not=20 eliminating routes, to cut capacity. FUEL COST HEDGING Delta said it has also entered into more oil price hedging contracts to=20 lock in prices now, and help insulate itself from rising oil prices. The=20 company said that as of March 7 it has hedged about 60 % of its expected=20 aircraft fuel requirements this year at an average 77 cents per gallon,=20 compared with a 50 % hedge at 75 cents per gallon in January. Jet fuel now= =20 costs about $1.10 per gallon on the wholesale spot market. Delta also said= =20 it has hedged 77 % of expected fuel requirements this quarter at 79 cents=20 per gallon, and 78 % of second quarter requirements at 76 cents per gallon.= =20 Analysts polled by Thomson First Call expect Delta to lose $3.04 per share= =20 this quarter, and $6.36 per share this year. Delta shares closed Monday on= =20 the New York Stock Exchange at $8.70, down 18 cents. The shares have=20 fallen 77 % from their 52-week high of $38.40 last March 11. *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@xxxxxxxxx Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Site of the Week: http://www.tha.gov.tt/ TnT Webdirectory: http://search.co.tt *********************************************************