With Delta and Northwest Quarterly Losses, All Five Major U.S. Carriers Start 2008 in the Red

By Mike Caggeso
Associate Editor

High fuel prices are to blame for Delta Air Lines Inc.'s (DAL) and Northwest Airlines Corp.'s (NWA) first-quarter losses, the companies said separately.

For the quarter, Delta posted a net loss of $274 million, or 69 cents per diluted share. Northwest, which Delta agreed to merge with a couple weeks ago, posted a $4.1 billion loss, or $15.78 a share, which included a $3.9 billion non-cash expense and other costs.

Delta said in a statement that its fuel costs increased by $585 million year over year. Northwest phrased their pain at the pump slightly different, saying it paid $2.77 per gallon for jet fuel in the first quarter compared to $1.85 a gallon in the first quarter of 2007, nearly a 50% increase.

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With their losses in the books, all five major U.S. airlines posted losses in the first quarter - as the diving dollar and a slowing economy added the strain of skyrocketing gas prices. And to recover, carriers are bumping up prices accordingly while trimming the number of planes in the air.

"Our need to respond to the pressures of dramatically rising fuel costs and a softening U.S. economy drove us to take a closer look at all options to protect Delta's future," Delta Chief Executive Officer Richard Anderson said in the statement. "The merger with Northwest will create an airline with the size, scale and global presence to weather economic downturns and compete long-term in the global marketplace."

U.S. Airways Group Inc. (LCC) is also expected to post a loss in its first-quarter earnings report, due today (Thursday).

Should that happen, the top eight U.S. carriers would all record first-quarter losses.

News and Related Story Links:

  • Delta Air Lines Inc.:
    Delta Air Lines Reports March 2008 Quarter Financial Results