Delta Air Lines, which is in the midst of a massive restructuring, reported a hefty net loss of $2.21 billion for the fourth quarter ended Dec. 31 including $1.4 billion in noncash charges, the majority of which were related to reductions in the fair market value of its wholly owned Delta Connection carriers Atlantic Southeast Airlines and Comair.
This compares to a net loss of $332 million available to common shareowners in the 2003 fourth quarter. Excluding unusual items in both periods, the company posted a $780 million net loss in the 2004 quarter compared to a $207 million net loss in the prior-year period.
Results for full-year 2004 were even worse. Including one-time items, Delta reported a $5.21 billion net loss available to common shareholders, significantly greater than the $790 million net loss recorded in 2003. Excluding unusual items, the 2004 net loss totaled $2.28 billion compared to $1.04 billion in the previous year.
CEO Gerald Grinstein said the results were disappointing and that if the airline is to survive, it "must develop a fundamentally different way of doing business."
Revenues for the quarter rose just 0.9% to $3.64 billion while operating expenses skyrocketed 48.4% to $5.9 billion on a 75.5% increase in aircraft fuel expense. As a result, operating loss amounted to $2.26 billion. This compares to an operating loss of $365 million in the 2003 fourth quarter.
At the unit level, passenger yield fell 7.1% to 11.84 cents on a 7.3% increase in traffic while passenger RASM decreased 5.6% to 8.73 cents on a 1.1-point gain in load factor. Operating CASM including fuel and one-time items climbed 40.2% to 15.46 cents. However, on a fuel-neutral basis with one-time items excluded, CASM dropped 2.2% to 10.15 cents.
For the full year, revenues increased 6.5% to $15 billion and operating expenses soared 23.1% to $18.31 billion, producing a $3.31 billion operating loss compared to a $785 million operating loss in the previous year.
During 2005, Delta said it will continue to implement its transformation plan that aims to achieve $5 billion in annual savings by 2006 compared to 2002. It already has accomplished $2.3 billion in cost cuts and is on track to deliver the remaining $2.7 billion through implementation of several initiatives, including elimination of 6,000-7,000 jobs by Dec. 2006; a 10% across-the-board cut in wages for executives, supervisory, administrative and frontline employees; revamping its hub in Atlanta, and de-hubbing its operations at Dallas/Ft. Worth.
In addition, the company's new agreement with its pilots, which is expected to save it $1 billion annually, went into effect Dec. 1. Delta also recently expanded its SimpliFares structure to include its entire domestic route network (ATWOnline, Jan. 6).
However, Grinstein said the carrier will face several issues this year related to debt and liquidity along with significant pension funding obligations, which he estimated at $400-$450 million.--Loren Farrar
ATW-Online Friday January 21, 2005
We wish another of the favorite airlines of the region the best of luck.
This compares to a net loss of $332 million available to common shareowners in the 2003 fourth quarter. Excluding unusual items in both periods, the company posted a $780 million net loss in the 2004 quarter compared to a $207 million net loss in the prior-year period.
Results for full-year 2004 were even worse. Including one-time items, Delta reported a $5.21 billion net loss available to common shareholders, significantly greater than the $790 million net loss recorded in 2003. Excluding unusual items, the 2004 net loss totaled $2.28 billion compared to $1.04 billion in the previous year.
CEO Gerald Grinstein said the results were disappointing and that if the airline is to survive, it "must develop a fundamentally different way of doing business."
Revenues for the quarter rose just 0.9% to $3.64 billion while operating expenses skyrocketed 48.4% to $5.9 billion on a 75.5% increase in aircraft fuel expense. As a result, operating loss amounted to $2.26 billion. This compares to an operating loss of $365 million in the 2003 fourth quarter.
At the unit level, passenger yield fell 7.1% to 11.84 cents on a 7.3% increase in traffic while passenger RASM decreased 5.6% to 8.73 cents on a 1.1-point gain in load factor. Operating CASM including fuel and one-time items climbed 40.2% to 15.46 cents. However, on a fuel-neutral basis with one-time items excluded, CASM dropped 2.2% to 10.15 cents.
For the full year, revenues increased 6.5% to $15 billion and operating expenses soared 23.1% to $18.31 billion, producing a $3.31 billion operating loss compared to a $785 million operating loss in the previous year.
During 2005, Delta said it will continue to implement its transformation plan that aims to achieve $5 billion in annual savings by 2006 compared to 2002. It already has accomplished $2.3 billion in cost cuts and is on track to deliver the remaining $2.7 billion through implementation of several initiatives, including elimination of 6,000-7,000 jobs by Dec. 2006; a 10% across-the-board cut in wages for executives, supervisory, administrative and frontline employees; revamping its hub in Atlanta, and de-hubbing its operations at Dallas/Ft. Worth.
In addition, the company's new agreement with its pilots, which is expected to save it $1 billion annually, went into effect Dec. 1. Delta also recently expanded its SimpliFares structure to include its entire domestic route network (ATWOnline, Jan. 6).
However, Grinstein said the carrier will face several issues this year related to debt and liquidity along with significant pension funding obligations, which he estimated at $400-$450 million.--Loren Farrar
ATW-Online Friday January 21, 2005
We wish another of the favorite airlines of the region the best of luck.