Delta plunges further into red, posts $651 million loss

Delta plunges further into red, posts $651 million loss    Delta Air Lines, which has warned investors it is considering filing for bankruptcy protection if it cannot substantially reduce its cost structure, reported a net third quarter loss of $646 million ($5.16 per share) compared with a net loss of $164 million ($1.36 per share) during the same 2003 period.
   Operating revenues were up 5.9 percent to $3.8 billion, but a 3.7 percent decrease in passenger unit revenues and a 14.9 percent increase in operating expenses outweighed any gains. Fuel expenses accounted for the largest increase in expenses, rising 63 percent, or $304 million. Delta said it expects fuel costs to exceed prior year levels by $950 million, with $820 million of that amount driven by higher fuel prices.
   Delta also blamed four major hurricanes during the quarter for a loss of $50 million in revenue.
   Delta is a large cargo carrier, but cargo is a small piece of the puzzle in an operation as large as Delta’s. Cargo revenues were up 2.6 percent in the quarter to $117 million from $114 million. For the first nine months of the year, cargo revenue is up 6.4 percent to $364 million.
   Delta has announced a transformation plan to reduce the size of its domestic network, restructure debt and get concessions from its unionized work force. Airline officials recently said they could file for bankruptcy in a matter of weeks and the latest results could accelerate that timeline.
   “As Delta’s financial situation continues to deteriorate, time is of the essence,” CEO Gerald Grinstein said in the earnings release.