Delta Air Lines today reported a net loss of $354 million and a loss per share of $2.90 for the March 2002 quarter versus a net loss of $122 million and loss per share of $1.02 in the March 2001 quarter, excluding unusual items.
Including unusual items, the March 2002 quarter net loss and loss per share were $397 million and $3.25, respectively, versus a net loss of $133 million and loss per share of $1.11 in the March 2001 quarter.
The results are in line with previous announcements concerning first quarter expectations.
"We continue to notice signs of gradual recovery," said Leo F. Mullin, Delta's chairman and chief executive officer. "We are focused on our recovery efforts and creating a more promising year in 2002. In the first three months of this year, we saw our customers and revenue returning, though revenues are recovering at a slower pace. There is still a long road ahead of us, but Delta has the financial and operational strength to emerge from these tough times as a winner."
March 2002 quarter operating revenues declined 19.3 percent from the March 2001 quarter. Excluding unusual items, operating expenses for the March 2002 quarter decreased 11.6 percent, unit costs decreased 1.2 percent and unit costs on a fuel price neutralized basis increased 1.7 percent.
Load factor for the quarter was 68.9 percent, on a 10.6 percent reduction in capacity,
compared to 67.0 percent for the same period a year ago.
Delta ended the quarter with a completion factor of 98.3 percent versus 96.1 percent during the same period last year.
"Delta's recovery is on track and we are making progress," said M. Michele Burns, executive vice president and chief financial officer. "In fact, in the month of March, Delta had positive cash flow from operations and we recorded an operating profit. Our financial strategy remains consistent and focused on capacity discipline, cost containment and cash preservation."
In the March quarter, Delta filed its 2001 tax return eight months early on February 6, 2002 and received a $160 million refund the following day. Subsequently, Congress passed the economic stimulus package, extending the net operating loss carry back period to five years. Delta again expedited the filing of its refund claim and received an incremental tax refund of $300 million on March 22, 2002. Delta ended the March 2002 quarter with total
liquidity of $3.1 billion comprised of a $1.5 billion cash balance and an additional near term liquidity position of $1.6 billion.
In a continuous effort to manage costs and preserve liquidity, Delta announced on March 14, 2002 that "base" commissions will no longer be paid to travel agents for tickets sold in the United States (including Puerto Rico and the U.S. Virgin Islands) and Canada, effective immediately. While Delta is
eliminating published base commissions, individually negotiated incentive commissions will continue to be paid to select agents. Delta expects the restructuring to reduce passenger commission expenses by approximately
$100-$150 million in 2002.
Delta's fuel hedging program saved $21 million, pretax for the quarter. Moreover, Delta has hedged 57 percent of its expected jet fuel requirements in the June 2002 quarter at an average price of $0.58 per gallon.
http://accesswdun.com/article/2002/4/195946