AMERICAS: Fuel and merger costs drag Delta into Q2 loss

Delta Air Lines posted a US$257 million second quarter loss saying it no longer forecasts a full-year profit amid the recession-induced travel slump. Delta’s loss included $390 million in losses from fuel hedges and $58 million of costs for its merger with Northwest Airlines. Excluding those charges, Delta said it would have net profit of […]


Delta Air Lines posted a US$257 million second quarter loss saying it no longer forecasts a full-year profit amid the recession-induced travel slump. Delta’s loss included $390 million in losses from fuel hedges and $58 million of costs for its merger with Northwest Airlines. Excluding those charges, Delta said it would have net profit of $191 million.

“We are not planning for any meaningful recovery in the coming months and no longer expect to be profitable this year,” chief financial officer Hank Halter wrote in a memo to employees.

The second-quarter result compared to a year-ago net loss of $1 billion, when Delta recorded $1.2 billion in special charges for write-downs, severance and closing of some facilities at airports.

Delta and Northwest’s combined quarterly operating revenues declined 23 per cent to $7 billion from $9 billion in the latest quarter. Delta said impact from the H1N1 virus on travel cut revenues by $125 million to $150 million. In the first six months of the year, the recession led to a $3 billion decline in Delta’s revenues.