Dow Jones Bankrupt Delta loss tops $1 billion
As battle with unions continues, bankrupt carrier lays out third quarter numbers.
November 10, 2005: 10:57 PM EST

SAN FRANCISCO (Dow Jones) - Delta Air Lines late Thursday reported that its third-quarter loss topped $1 billion as the bankrupt carrier's fuel bill rose 53% to $1.2 billion .

The Atlanta carrier's (DALRQ) quarterly loss totaled $1.13 billion, or $6.73 a share, wider than the $646 million , or $5.16 a share, reported last year.

The quarter's results include a $607 million charge for the rejection of 40 leased jets as well as writing off debt-related costs and an $86 million charge for a settlement of a pension payout for its pilots.

The company's operating loss totaled $240 million, narrower than the $423 million a year ago.

The company's top finance executive said that the company cannot relent with its cost cuts.

"While we are pleased with the level of post-petition financing we were able to obtain, we must stop using borrowed money to fund our losses," said Edward Bastian, Delta chief financial officer, in a statement.

Revenue during the quarter rose 8.9% to $4.22 billion, up from $3.87 billion . Higher

Delta said that its operating capacity rose 5% in the quarter as changes to its Atlanta hub made operations there more efficient.

Labor expenses during the quarter fell almost 24% to $1.24 billion .

Excluding the effect of fuel and special items, Delta said that its operating expenses fell at its mainline operations. But total operating expenses were $4.5 billion, up from $4.3 billion last year.

The company said it had $2.6 billion in cash and equivalents as of Sept. 30 , of which $1.4 billion is unrestricted.

Delta filed for bankruptcy protection on Sept. 14, the same day as Northwest Airlines (NWACQ). Since then, Independence Air parent FLYi Inc. (FLYIQ) has also filed for bankruptcy protection.

So far, Delta has taken steps to restructure the 77-year old company. It is beefing up its overseas routes, which typically have higher revenue. Domestically, the company announced that it will fold its leisure-oriented Song brand flights into the mainline Delta schedule later next year, ending its operation as a separate airline within the company.

The company also is making legal preparations to break its contract with the pilots union, its only unionized work group. But the pilots, who are represented by the Air Line Pilots Association, said Wednesday that they "will not willingly work without a contract," according to the ALPA Web site.

(END) Dow Jones Newswires

11-10-05 1814ET Copyright (c) 2005 Dow Jones & Company, Inc. Copyright (C) 2005 Dow Jones & Company, Inc. All Rights Reserved.  Top of page

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