Delta first-quarter loss widens NEW YORK (Reuters) =97 Delta Air Lines posted a wider first quarter loss=20 Thursday, surpassing losses reported by two other airlines this week, and=20 said it will continue to furlough pilots amid a crippling downturn in air=20 travel. Atlanta-based Delta, the No. 3 U.S. air carrier, said it was facing= =20 the greatest financial crisis in its history, and said the war in Iraq had= =20 depressed travel demand further. Delta Chief Executive Leo Mullin warned=20 analysts and investors that the second quarter will be "extremely=20 challenging," even though a large part of Delta's expected $400 million in= =20 government aid could materialize during the period. But Delta's shares jumped more than 9%, as analysts reiterated views that=20 the airline is better prepared than its rivals to deal with the industry's= =20 historic depression. "Delta's first quarter results were weak, but in line= =20 with expectations," Lehman Brothers analyst Gary Chase said. The airline=20 reported a net loss of $466 million, or $3.81 a share, compared to a loss=20 of $397 million, or $3.25 per share, a year earlier. Northwest Airlines and= =20 Continental Airlines have already reported $617 million in combined losses= =20 this week, as the tepid economy, the war in Iraq, and the spread of Severe= =20 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=20 quarter well over the $1 billion mark. The airline burned through $2.7=20 million in cash per day during the quarter, Mullin said. Advance ticket=20 bookings are still showing weakness past April, and Delta's passenger=20 capacity for the coming quarter will be down 10% to 12% as costs stay=20 higher, Delta Chief Financial Officer Michele Burns said. But industry=20 watchers say Delta, whose first-quarter revenue rose slightly to $3.2=20 billion from $3.1 billion, is better-prepared than most of its rivals to=20 survive the industry's downward spiral. "We attribute Delta's revenue=20 strength relative to its peers to a larger proportion of capacity that is=20 domestic and has been less affected by the Iraqi war," Credit Suisse First= =20 Boston analyst Jim Higgins said. Shares of Delta rose 96 cents, or 9.15%,=20 to $11.45 in midday trade on the New York Stock Exchange. Before pension=20 costs and other items, Delta reported a loss of $426 million, or $3.49 per= =20 share. Analysts had expected a loss of $3.51 per share, according to=20 Thomson First Call. "URGENCY" FOR PILOT TALKS Delta said lower travel demand caused by the war in Iraq forced a furlough= =20 of 200 pilots during April and May, in addition to an 18% work force cut=20 that began after Sept. 11, 2001. The airline, which has 8,300 active=20 pilots, said it lost $125 million in quarterly revenue due to the war.=20 Delta has asked its pilots, its only major unionized group, to start talks= =20 on contract changes that could cut labor costs. Industry leader American=20 Airlines, owned by AMR Corp.,narrowly avoided a bankruptcy filing on=20 Wednesday after its flight attendants, the only group that had not ratified= =20 its part of a $1.8 billion concessions package, approved cuts. Delta's=20 pilots are currently reviewing Delta's finances, and will present their=20 findings to pilot representatives within the next few weeks, a union=20 spokesman said on Wednesday. No official talks between pilots and the=20 airline have begun. Mullin expected talks over potential cost reductions to= =20 be "moving forward with a sense of urgency on both sides." LIQUIDITY A STRONG POINT The U.S. Department of Transportation approved in March a revised proposal= =20 from Delta, No. 4 carrier Northwest, and No. 5 Continental to sell seats on= =20 each others' flights and offer reciprocal frequent flyer perks. Delta said= =20 it expects the marketing agreement to eventually yield an extra $150=20 million to $200 million per year in revenue, though it will only add $10=20 million this year. Mullin said Delta aims to cut non-fuel costs by 15% in=20 2005, including productivity measures and labor cuts. Delta ended the=20 quarter with $2.5 billion in cash and short-term liquidity, including=20 unrestricted cash of $1.9 billion. Analysts look to a carrier's cash level= =20 for proof it can withstand unusual events that might hurt its results.=20 Delta said it was able to arrange for $900 million in incremental financing= =20 this month to replace facilities that will expire later this year. It also= =20 generated nearly $400 million in new aircraft-backed financing using=20 enhanced equipment trust certificates (EETCs). *************************************************** 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.carstt.com TnT Webdirectory: http://search.co.tt *********************************************************