Delta reports 4th quarter net loss of $1.2 billion
Bankrupt Delta Airlines’ fourth quarter net loss narrowed to $1.2 billion, compared to a net deficit of $2.2 billion in the prior year quarter.
The quarterly net loss included a $277 million charge relating to reorganization items and a $176 million net charge associated with pension and restructuring items.
The Atlanta-based airline posted a fourth quarter operating loss of $675 million, an improvement over the $2.2 billion operating deficit recorded in the same quarter last year.
Operating revenue improved 6.2 percent to $3.9 billion from $3.7 billion. Cargo revenue increased just 0.7 percent to $137 million.
For the full year, Delta posted a net loss of $3.8 billion, from a net loss of $5.2 billion in 2004. Delta’s operating loss shrunk to $2.0 billion from $3.3 billion. Delta’s annual total operating revenue is up 6.3 percent to $16.2 billion from $15.2 billion with cargo revenue improving 4.8 percent to $524 million. The airline’s fuel costs in 2005 surged 46.1 percent to $4.3 billion.
“Losses of the magnitude that Delta recorded in 2005 are not sustainable,” said Edward H. Bastian, Delta’s executive vice president and chief financial officer. “These losses emphasize the need for the urgency with which we have to pursue route network and revenue improvements and the use of the bankruptcy process to reduce the cost and complexity of our business.”
In September, Delta filed a petition for reorganization under Chapter 11, under which the airline plans to lower costs by $3 billion a year by the end of 2007, on top of a previous cost-savings target of $5 billion a year by the end of 2006. The airline hopes to achieve the extra cost savings by improving revenue and network productivity, as well as cutting back on some 7,000 to 9,000 employees by the end of 2007.
“2006 will be a year for Delta to stabilize our financial situation. While masked by the high cost of fuel, our restructuring initiatives have begun to produce tangible results this quarter in the form of increased unit revenue and lower mainline non-fuel costs, ” said Bastian. “By maintaining our focus on these efforts, I am confident that we can be successful in positioning Delta to emerge from bankruptcy as a profitable, competitively strong airline.”