Delta reports the worst of losses at three major airlines
By Associated Press
Published October 21, 2004
ATLANTA - Three of the nation's largest airlines reported a combined $911-million in third-quarter losses Wednesday. The largest was at Delta Air Lines Inc., where bankruptcy looms unless it can quickly win concessions from its pilots and debt holders.
Soaring fuel prices were the main culprit for the red ink at AMR Corp., parent of American Airlines, Northwest Airlines Corp. and Delta, whose situation has been exacerbated by the cost of servicing its $20.6-billion in debt. All three reported higher revenue.
Delta said its unrestricted cash reserves fell to $1.45-billion as of Sept. 30 from $2-billion on June 30. The nation's third-largest carrier said it desperately needs $1-billion in cuts from its pilots and new debt terms from some of its creditors.
The pilots union said in a memo late Wednesday that its talks with management will continue through the weekend. The memo said that "because of the time constraints presented by Delta's worsening financial condition," the union's executive committee will reconvene on Monday for an update. The union will not update members again "until the process concludes," the memo said, suggesting talks are winding down.
Fuel prices, meanwhile, continue to hit the major carriers hard.
"Fuel costs are ultimately going to affect all of the airlines in some way," said Frank Werner, an industry expert who teaches finance at Fordham University in New York. But "the big carriers are still flailing along searching for the answer, and they don't have it yet."
