Delta Air Lines, the nation’s largest carrier, reported a fourth quarter loss of $1.4 billion, or $2.11 a share, citing fuel costs and a non-cash charge related to stock options after buying Northwest Airlines. The carrier was hit by some hefty one-time charges: a $900 million non-cash charge related to employee equity awards in the most recent period and a $91 million loss on out-of-period fuel hedges. Deducting those two charges nets a loss of $340 million, or 50 cents per share. The airline did say that they expect to be profitable in ’09, saying that they will benefit from low fuel prices as well as the capacity cuts made in the last half of 2008.
Let’s get into the numbers a tad more. Delta’s operating revenue rose $22.7 billion, or 18%, from $19.2 billion. Expenses rose 72% to $31 billion from $18 billion. Oil expenses rose 55% to $7.3 billion from $4.7 billion (previous year). Delta also saw a 3% gain in passenger revenue per available seat mile (RPM).
Initially, when I looked at the original number of $1.4 billion, I was stunned. However the 2 one-time charges that Delta saw wiped that away – well… sorta. Overall, they didn’t do too bad. They only lost $340 million for the last quarter, which is pretty nice considering that they are the largest carrier.
Delta did announce some fleet retirement plans – consisting of 40 to 50 mainline aircraft being removed from its fleet; aligning with the 6-8% anticipated capacity cuts that Delta will be making. Delta currently has the volunteer staff reduction plan special going, to meet target with the system route / capacity cuts. It’ll be an interesting year for Delta, but I think they’ll do quite well – just as they predict.
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