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Company Watch - Delta Air Lines.

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Bankruptcy charges push Delta into $2.2 billion loss as operating result improves. Hit hard by costs associated with its Chapter 11 reorganization, Delta Air Lines yesterday reported a second-quarter net loss of $2.2 billion, widened from a deficit of $382 million in the year-ago period.The airline said it earned $175 million in net income for the quarter excluding restructuring items, reversing a net loss of $304 million excluding special items in the year-ago quarter. "Delta's second quarter results continue to reflect both the solid progress we are making in our restructuring and the substantial challenges we are facing from high fuel prices," CFO Edward Bastian said. "We are aggressively restructuring our business." Aug 10, 2006

Delta Air Lines also reiterated its commitment to restructuring its route network to reduce domestic capacity and expand international operations, although yesterday it announced the launch of a daily Atlantic City-Orlando service from Nov. 15. Delta's international capacity increased 21.5% in the second quarter compared to the previous year. As of June 30, it was operating 65 fewer mainline aircraft compared to last year. Aug 10, 2006

Delta Air Lines CEO Gerald Grinstein said Delta remains "on track" to exit bankruptcy in the first half of 2007. He said termination of its pilots pension plan will be critical to the reorganization effort, although second-quarter earnings were weighed down heavily by a $2.1 billion charge related to the reopening of the pilots' collective bargaining agreement. Aug 10, 2006

Delta Air Lines's operating revenues rose 9.6% to $4.7 billion while expenses fell 2.1% to $4.3 billion, net of a 5.4% fuel cost increase to $1.1 billion, reflecting a 30% rise in cost per gallon offset by an 18.7% reduction in consumption. Operating income was $369 million, nearly a $500 million positive swing from an operating loss of $129 million a year ago. Yield grew 15% to 14.07 cents as RPMs declined 5.1% to 30.1 billion. With capacity down 6.8% to 37.7 billion ASMs, load factor rose 1.4 points to 79.68%, pushing RASM up 17.5% to 12.34 cents while CASM excluding fuel fell 5.5% to 8.42 cents. Aug 10, 2006

Delta Air Lines Posts USD$2.2 Bln Q2 Net Loss Delta on Wednesday posted a wider quarterly loss as it recorded more than USD$2 billion in bankruptcy related costs. Delta, which has been cutting costs and reorganizing operations under bankruptcy protection since last September, reported a quarterly net loss of USD$2.2 billion, compared with a net loss of USD$382 million in the same quarter a year ago. The large quarterly loss was chiefly the result of a USD$2.1 billion charge taken by Delta relating to a collective bargaining agreement it struck with its pilots in May. Excluding reorganization costs, Delta reported income of USD$175 million for the quarter, compared with a loss of USD$304 million on the same basis in the year-ago quarter, helped by some ticket price increases and restructuring its route network. Operating revenues rose 10 percent to USD$4.65 billion. The airline "remains on track to exit bankruptcy in the first half of 2007," said Chief Executive Aug 9, 2006

Delta Air Lines flew 11.76 billion system RPMs in July, a drop of 0.6% from the year-ago month. Capacity fell 2.1% to 13.77 billion ASMs and load factor rose 1.3 points to 85.4%. Domestic RPMs declined 10.6% to 8.03 billion against a 12.6% decrease in ASMs to 9.38 billion. Load factor rose 2 points to 85.7%. International traffic was up 31.3% to 3.73 billion RPMs, capacity grew 31.8% to 4.4 billion ASMs and load factor fell 0.3 point to 84.9%. Aug 8, 2006

Delta Air Lines Seeks To Outsource Work To IBM. Delta has asked a US bankruptcy court to let it outsource some computer-related work to IBM in a move that would save costs and cut 200 jobs, the airline said on Tuesday. Delta currently operates and maintains its own computer infrastructure, which it uses for applications such as reservations, record-keeping and communications, through its unit Delta Technology. Outsourcing the task to IBM will save on costs and allow it to focus on restructuring, the airline said in a court filing. The employees affected by the plan will have the opportunity to transition to IBM, Delta spokeswoman Betsy Talton said. The unit has a total of 1,800 employees. Earlier this year, the airline asked the court to let it launch an incentive plan to keep employees at Delta Technology from leaving, saying the subsidiary had seen attrition in its ranks spike over the last year. The job cuts are part of the airline's plans to slash 7,000 to 9,000 jobs, as part of cost cutting aimed at returning to profitability, Talton said. Aug 8, 2006

Delta Air Lines on Friday filed for final US Bankruptcy Court clearance to terminate its pilots' pension plan effective Sept. 2. The move, which the pilots union has agreed not to oppose, would affect 13,000 active and retired workers and is part of the carrier's effort to cut costs in order to emerge from Chapter 11 bankruptcy protection. Defined retirement programs for 91,000 active and retired flight attendants and ground employees will not be terminated, the airline said. Aug 7, 2006

Delta Air Lines said pension reform legislation passed by the US Senate last week does not mitigate its need to jettison the heavy costs of the pilots' retirement program. The plan's "costs are unaffordable and would prevent the company from successfully reorganizing and emerging from bankruptcy," it said in a statement. "The pilot plan's costs are expected to exceed $1 billion in the near term alone, even if pension reform legislation passed by Congress is signed into law." Aug 7, 2006
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Publication:Airguide Online
Geographic Code:1USA
Date:Aug 14, 2006
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