AMERICAS: Delta posts Q4 loss of US$1.4 billion
Delta Air Lines lost US$1.4 billion in the fourth quarter of 2008, including a massive one-time special charge related to its merger with Northwest Airlines,along with losses from fuel hedges. But the carrier is confident next year will be better, with chief executive Richard Anderson saying he expects that Delta will be “solidly profitable in […]
February 1, 2009
But the carrier is confident next year will be better, with chief executive Richard Anderson saying he expects that Delta will be “solidly profitable in 2009 driven by lower fuel costs, capacity discipline, and merger synergies.”
Delta expects to save US$5 billion on fuel costs this year and US$1 billion by cutting flight capacity, while generating US$500 million in benefi ts from its merger with Northwest.
For the full year of 2008, the losses at Atlanta-based Delta totaled US$8.9 billion, mainly due to accounting writedowns refl ecting the decreased value of the company due to record fuel prices earlier in the year. Delta said it also expects to report a “sizable loss” in first quarter 2009.
“Our fuel hedges turned out to be an expensive insurance policy in the short term, but we continue to believe that a systematic fuel hedging program is the most prudent way to mitigate the impact of volatile fuel prices,” Anderson said.
The company announced that it plans to take 40 to 50 mainline aircraft out of its fleet as it cuts flight capacity by 6 per cent to 8 per cent this year. The airline has a total of 1,147 aircraft, including about 850 mainline planes.