Delta Reports Severe Financial Crisis
Thursday, April 17th 2003, 12:00 am
By: News On 6
ATLANTA (AP) _ Delta Air Lines said Thursday it faces the worst financial crisis in its history as it reported a wider first-quarter loss and said it will need to cut costs even further.
For the three months ending March 31, Delta lost $466 million, or $3.81 a share, compared with a loss of $397 million, or $3.25 a share, for the same period a year ago.
Excluding one-time items _ mainly charges for pension benefits related to job cuts _ Delta said it lost $426 million in the quarter, or $3.49 a share. That beat the lowered expectations of analysts surveyed by Thomson First Call, who predicted a loss of $3.51 a share.
Revenue in the quarter was $3.16 billion, a slight increase from the $3.10 billion the airline brought in a year ago.
Atlanta-based Delta, which lost $1.3 billion last year, has laid off 16,000 employees since the Sept. 11 attacks.
On Thursday, the nation's third-largest airline said it plans to furlough an additional 200 pilots this year because of a drop-off in travel due to the war in Iraq. It also plans to reduce capacity by 10 percent and will remove 12 MD-11 aircraft from service.
Delta blamed the war for $125 million, or more than one-quarter, of the first-quarter loss.
``Even as we face the greatest financial crisis in Delta's history, which is deepened by the impact of military action in Iraq, Delta continues to successfully reduce costs, preserve liquidity and implement the strategic elements of our long-term plan for survival,'' chief executive Leo Mullin said.
For major carriers like Delta, the war in Iraq and the deadly SARS illness in Asia have slowed international travel. At home, the struggling economy has prompted deep discounts on flights.
Other airlines also reported deep losses this week. Continental lost $221 million in the quarter, while Northwest lost $396 million in the quarter.
Delta plans to hold its annual shareholder meeting next week in New York.
The company has faced criticism because in the midst of the layoffs it revealed Mullin earned millions last year. Mullin responded by saying he would cut his pay another 15 percent and wouldn't accept incentive payments this year.