Delta Losses

[ptc]

Delta losses soar in fresh crisis


US travel has been hit by the impact of four hurricanes
Losses at struggling US airline Delta Air Lines quadrupled in the past three months, further threatening the carrier's survival.
Battered by soaring fuel costs and weak demand, Delta made a $646m (£355m) loss in the period to 30 September.

Delta warned this month that insolvency is a real possibility unless it can push through a restructuring plan which would slash its costs by $5bn a year.

The plan would result in the loss of up to 7,000 jobs.

Perilous situation

America's third largest carrier has now made a total loss of $3bn in the past nine months.

A leading credit agency said Delta faced an imminent decision on whether it should seek Chapter 11 bankruptcy protection.

Despite the company's already perilous situation, analysts said the figures were worse than they had expected.

Time is of the essence

Gerald Grinstein, Delta Air Lines

The firm made a loss, including exceptional items, of $646m in the three months to the end of September.

This compares with a $164m loss for the same period last year.

Passenger revenues fell 3.7% as air travel in the US was affected by the impact of four consecutive hurricanes.

"As Delta's financial situation continues to deteriorate, time is of the essence," said chief executive Gerald Grinstein.

Credit agency Standard & Poor's said Delta must quickly reach an agreement with its pilots over labour costs and pension entitlements if it was to stave off insolvency.

"Given Delta's heavy losses and dwindling liquidity, the company will likely have to decide whether to seek bankruptcy protection within weeks," S&P analyst Philip Baggaley told AFP.

[Panama Jack]

Looks like they might be the airline to watch during the next couple of weeks:

Report: Delta Air could file for bankruptcy soon
WASHINGTON (Reuters) — Delta Air Lines Inc. could file for Chapter 11 bankruptcy protection as soon as next week, the Washington Post reported in its Saturday edition, citing an unnamed source familiar with the situation.
The troubled airline could file as early as Wednesday or Thursday, according to the article on the newspaper's web site. But a filing could be delayed if the airline is able to obtain $1 billion in pay and benefit cuts it has sought from its pilots.

A company spokeswoman told Reuters that the company plans to do whatever it can to avoid filing for bankruptcy protection.

"Given Delta's financial situation, there is no question that we are in a race against time, but we are doing every thing possible to do what we can outside of bankruptcy," Delta spokeswoman Patsy Mulcahy told Reuters.

Still, even if pilots agree on the concessions, a Chapter 11 is likely, the Post wrote.

Earlier this week, the troubled carrier reported a third quarter net loss of $646 million, or $5.16 a share. The four hurricanes that struck the U.S. crippled a significant portion of Delta's southeastern operations during the quarter, resulting in an estimated revenue loss of about $50 million.

In addition, operating expenses for the September 2004 quarter increased 14.9% from the same period a year ago, primarily because of a 63.1% hike in fuel costs, the company said.

Delta's bankruptcy filing would mark it as the third U.S. carrier operating under Chapter 11 at the same time. That hasn't happened among the top 10 domestic airlines since 1992, the Post wrote.