More fuel news

[F-U-Jimmy]

Delta, Northwest report combined $10.5B loss on fuel costs

Delta Air Lines Inc., the nation's third-largest carrier, said Wednesday its loss widened in the first quarter to a whopping $6.39 billion because of soaring fuel prices and the steep decline in the company's market value.

Northwest Airlines, which will be acquired by Delta to create the world's largest airline, reported a $4.1 billion loss in the first quarter.

Delta's results badly missed Wall Street expectations, despite a 12 percent increase in sales.

The Atlanta-based company said the loss is equivalent to $16.15 a share. That compares with a loss of $130 million that Delta reported in the January-March quarter a year
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ago, when it was still in bankruptcy.

Excluding special items, primarily a $6.1 billion non-cash charge relating to the decline in Delta's market value due to sustained record fuel prices, the airline lost $274 million, or 69 cents a share, in the first quarter.

In a memo to employees Wednesday, Ed Bastian, Delta's president and chief financial officer, said the airline expects some of its peers in the industry to record similar adjustments. A spokeswoman said Delta would have recorded the charge regardless of the tie-up with Northwest.

Analysts were expecting a Delta loss of 49 cents a share, excluding one-time items.

Revenue in the quarter rose to $4.77 billion, from $4.24 billion in the same period a year ago. Delta shares rose 9 cents, or 1.3 percent, to $6.89 in morning trading.

The company said its first-quarter loss before special items was driven by a $585 million year-over-year increase in the cost of fuel.

When it exited Chapter 11 protection, Delta projected its stock would be worth $9.4 billion to $12 billion in all, but that was assuming the price of crude would be at $70 per barrel.

Gas and oil prices pushed further into record high territory Tuesday, with crude nearing $120 a barrel. Retail gas reached a national average of $3.51 a gallon for the first time. Delta's current market value is roughly $2.7 billion, based on 395.6 million shares outstanding, which include shares not yet distributed to some creditors from its bankruptcy.

Delta announced last week that it would acquire Northwest Airlines Corp. in a stock-swap deal, which still must be approved by regulators and shareholders.

"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," Chief Executive Richard Anderson said in a 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."

[farkedup]

we'll be bitching about plane ticket prices going up soon.... they'll just pass that expense on to us

[RyuLion]

shit balls..

[GetSCORECash]

The funny thing is that once these two combine, in about a five years, the future DELTA will be way smaller then either one of these companies on thier own.

They have no reason to merge, but to make a buck right now, in the next six months, and it won't be that much.

[jalami]

It just seems like nobody wants to be the first airline to bring up their prices to compensate for sky-high fuel costs because then they'd lose their passengers in droves... so instead they're fighting a war of attrition to see who's left standing in the end. Sounds like a silly strategy for everyone involved.

[Michaelious]

Either way it sucks for us in the long run.