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Delta Loses $383-million In 1st QTR  
User currently offlinePlanemaker From Tuvalu, joined Aug 2003, 6240 posts, RR: 34
Posted (10 years 6 months 1 week 3 days 5 hours ago) and read 2933 times:

Delta Air Lines Reports First Quarter Loss of $383 Million

Delta Air Lines today reported a $383 million net loss for its first quarter of 2004, which ended March 31, down from the 2003 net loss of $466 million.

"This was a disappointing quarter for Delta and there are more challenging times ahead," said Gerald Grinstein, Delta's chief executive officer. "Continued losses of this magnitude are unsustainable. Delta must regain sustained profitability so we can compete effectively. The urgent task is to achieve a competitive cost structure so that Delta can generate a positive cash flow, reduce its debt burden and return to profitability."

First quarter operating revenues increased 4.3 percent and passenger unit revenues increased 0.6 percent, compared to the March 2003 quarter. The load factor for the quarter was 70.6 percent, a 1.7 point increase as compared to the March 2003 quarter. System capacity was up 3.5 percent and mainline capacity was up 1.2 percent from the prior year.

Operating expenses for the March 2004 quarter remained flat with the prior year, although capacity increased. Despite record high fuel costs, Delta's unit costs decreased 3.6 percent from the March 2003 quarter.

"These results clearly show the progress we have made in reducing costs through our profit improvement initiatives," said M. Michele Burns, Delta's executive vice president and chief financial officer. "These initiatives must be combined with achieving a lower pilot cost structure if the company is to reach its goal of cost competitiveness."

In the March 2004 quarter, Delta's fuel hedging program reduced operating expenses by $32 million, pretax. Delta hedged 34 percent of its jet fuel requirements for the quarter at an average price of $0.76 per gallon, excluding fuel taxes. Delta's average total fuel price for the March 2004 quarter was $0.95 per gallon.




Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
20 replies: All unread, jump to last
 
User currently offlineConcordeBoy From , joined Dec 1969, posts, RR:
Reply 1, posted (10 years 6 months 1 week 3 days 3 hours ago) and read 2855 times:

...'least they warned about it  Crying


CO releases results tomorrow... hope that's a brighter picture.


User currently offlineRichierich From United States of America, joined Nov 2000, 4273 posts, RR: 6
Reply 2, posted (10 years 6 months 1 week 3 days 3 hours ago) and read 2811 times:

"Let me hear that Song, Song Song Song"!




None shall pass!!!!
User currently offlineCol From Malaysia, joined Nov 2003, 2122 posts, RR: 22
Reply 3, posted (10 years 6 months 1 week 3 days 3 hours ago) and read 2782 times:

Cash burn is also huge. Need to do something quick.

User currently offlinePlanemaker From Tuvalu, joined Aug 2003, 6240 posts, RR: 34
Reply 4, posted (10 years 6 months 1 week 3 days 2 hours ago) and read 2746 times:

Yup, that was Delta's 13th straight quarter of operating losses!


Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
User currently offlinePanamair From United States of America, joined Oct 2001, 4920 posts, RR: 25
Reply 5, posted (10 years 6 months 1 week 3 days 2 hours ago) and read 2717 times:
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Negative cash flow of $280m from operations for the quarter was due to funding of the retirement plans. Without this funding, it would have been a positive $116m strictly from operations. DL expects to pump another $65m into these retirement plans for the rest of 2004.

User currently offlineLono From United States of America, joined Apr 2004, 1335 posts, RR: 1
Reply 6, posted (10 years 6 months 1 week 3 days 2 hours ago) and read 2704 times:

Sad thing is... How many great air carriers did DL kill (forced mergers or accusations of carriers in their way)to get to this sorry state.... DL Management has a long history of being slow to react to changing competition... hard to feel sorry for them....


Wally Bird Ruled the Skys!
User currently offlineAirTran737 From United States of America, joined Apr 2004, 3704 posts, RR: 12
Reply 7, posted (10 years 6 months 1 week 3 days 2 hours ago) and read 2687 times:
Support Airliners.net - become a First Class Member!

Captain Smith says full speed ahead as the Titanic speeds towards the iceberg.


Nice Trip Report!!! Great Pics, thanks for posting!!!! B747Forever
User currently offlinePlanemaker From Tuvalu, joined Aug 2003, 6240 posts, RR: 34
Reply 8, posted (10 years 6 months 1 week 3 days 2 hours ago) and read 2675 times:

Here's another news clip from today...

Delta blames pilots for financial woes
Darren Shannon, ATI, Washington DC (14Apr04)

Delta Air Lines’ senior management today blasted the carrier’s pilots for its continued financial woes, and warned that union intransigence to salary reform could push the airline into deeper trouble.

The airline’s two senior officers, CEO Gerald Grinstein and CFO Michelle Burns, during the airline’s first quarter analyst conference call, both noted that “the current pattern of losses and liquidity are unsubstantiated in the long term” and that “the major boulder blocking the road to a competitive cost structure is Delta’s pilot costs”.

These salaries – which are “by far the highest in the industry” – contribute to a cost structure that “is no longer competitive”, says Grinstein. A first quarter net loss of $383 million, on a $388 million operating loss, will only worsen when the pilots take a contractually scheduled 4.5% pay increase in May, adds the CEO.

“The most pressing priority [for Delta’s reform] is a competitive cost structure,” says Grinstein, adding that “the most significant challenge is the pilots”.

The pilot are also hindering Delta’s other significant problem: a $20 billion debt. Citing a need to “avoid additional debt”, the CEO says a business plan issued by the pilots’ union Air Line Pilots Association (ALPA) not only hinders cost reform “but also puts us further into debt”.

“We cannot take half steps backwards,” he says.

A restructuring plan has been a fundamental part of Grinstein’s management since he assumed the CEO role at the beginning of the year. However, despite piecemeal reforms in various parts of the airline and senior level meetings as recently as two weeks ago, a draft plan is not expected until late summer, says Grinstein, when “leadership teams” meet with the airline’s board to discuss reorganization.

This could mean Chapter 11 bankruptcy protection, a concept ALPA admits is under debate, although both sides appear to regard this as a last resort. “I hope there is no court authorized restructuring,” says Grinstein. However, this statement was preceded by the CEO’s warning that there will be “no deal with the pilots if it doesn’t allow for a competitive cost structure”.



Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
User currently offlineMSYtristar From , joined Dec 1969, posts, RR:
Reply 9, posted (10 years 6 months 1 week 3 days 2 hours ago) and read 2654 times:

Sad to see a once proud airline like Delta get to this state. Honestly, though, Lono is right. They sort of had it coming to them. This should not surprise anybody. Delta used to have a strong history of great service. Once Ron Allen left, things really went downhill in a hurry. I'll shed a few tears if they go under (unlikely as it may be) just for the employees that will be affected, but for the entity known as Delta itself...I won't get too upset.


Steve/MSY


User currently offlineMSYtristar From , joined Dec 1969, posts, RR:
Reply 10, posted (10 years 6 months 1 week 3 days 2 hours ago) and read 2618 times:

As the old saying goes, what goes around comes around. Even though this has nothing to do with DL's current state of affairs, Delta's rape of Pan Am in 1991 really left me (and without question numerous people worldwide) with a bad taste in my mouth and an ultimate loss of respect for Delta.

DL's current state of affairs can be attributed to poor management over the past few years. It seems like Grinstein has the vision to see Delta turn things around, but without the pilot concessions, Delta is a sinking ship in a vast ocean. And you guarantee that there are sharks in the water circling.


Steve/MSY


User currently offlineConcordeBoy From , joined Dec 1969, posts, RR:
Reply 11, posted (10 years 6 months 1 week 3 days 2 hours ago) and read 2558 times:

How many great air carriers did DL kill (forced mergers or accusations of carriers in their way)to get to this sorry state....

You've got this airline and AA confused.

DL is known for some of the most shrewd/successful mergers in aviation history (particularly Western).


User currently offlineLono From United States of America, joined Apr 2004, 1335 posts, RR: 1
Reply 12, posted (10 years 6 months 1 week 3 days 1 hour ago) and read 2512 times:

concordeboy
There are many former WA employees that would disagree with how successful the WA/DL merger was..... many at WA got the short end of the stick....




Wally Bird Ruled the Skys!
User currently offlineIsitsafenow From United States of America, joined Feb 2004, 4984 posts, RR: 23
Reply 13, posted (10 years 6 months 1 week 3 days ago) and read 2449 times:

According to the financial columns, DL had two billion dollars in the till January first. Simple math shows they are down to 1.617 billion. When they get to 800 million its time to file. That's what Wall Street said.
You never drain the till 100 per cent or you shut it down for good. You gotta have something in reserve.
safe



If two people agree on EVERYTHING, then one isn't necessary.
User currently offlineFlyPNS1 From United States of America, joined Nov 1999, 6623 posts, RR: 24
Reply 14, posted (10 years 6 months 1 week 3 days ago) and read 2408 times:

As the old saying goes, what goes around comes around. Even though this has nothing to do with DL's current state of affairs, Delta's rape of Pan Am in 1991 really left me (and without question numerous people worldwide) with a bad taste in my mouth and an ultimate loss of respect for Delta.

Give me a break...by time DL got to Pan Am, there was nothing left but a sad shell of a company. Pan Am destroyed itself long before DL ever entered the picture. DL tried to pick up what few pieces were remaining and as it turned out, there really was nothing of great value left.

As for DL's current situation, poor management and a out of touch pilots union are the big culprits. If DL can somehow fix those two problems, they'll be ok. If not, DL's future will be grim.





User currently offlineMSYtristar From , joined Dec 1969, posts, RR:
Reply 15, posted (10 years 6 months 1 week 2 days 23 hours ago) and read 2367 times:

FlyPNS1, you're entitled to your opinion and I respect that. You are right, Pan Am was a shell of it's former self. It did have some worth, however, as it's Caribbean and Latin American operations were it's best markets as far as revenue goes. Delta did a good job in keeping the hopes of numerous PA employees up, only to say "well, maybe this was a mistake". But that's all in the past. And I, for one, will never forget it.


Steve/MSY


User currently offlineDeltadude8 From United States of America, joined Feb 2000, 569 posts, RR: 4
Reply 16, posted (10 years 6 months 1 week 2 days 23 hours ago) and read 2311 times:

Ask any DL employee about Ronald Allen...

99.9% of them will say he almost crashed the airline...

LEO SAVED DL from the crash...

Year____Cities Served____Countries____Employ___Loss/Income(in Mils)
92______219____________34_________77907____-674.9
94______210____________32_________69000____-447.0
96______178____________25_________60250____+1300
97______190____________38_________62450____+1600

LEO entered the picture in 1997 and he had major impacts on how 1996 went with the olympics. Leo did a wonderful job and DL was still raking in positive incomes until 2000.


User currently offlineLono From United States of America, joined Apr 2004, 1335 posts, RR: 1
Reply 17, posted (10 years 6 months 1 week 2 days 22 hours ago) and read 2270 times:

Deltadude8
you are correct!!!!
Ron Allen's big mistake was to pay long time employees (early out retirement) to go away... These employees were very experienced and dedicated and they were made to feel sub-standard.... He through his "7.5" program(1994-95) damn near killed DL... But in the process he doubled the stock value "by saving overhead"... He doubled his net worth(stock options) by making "high" paid employees go away... And by laying off many ramp/cargo pogies and outsourcing... This resulted in cost immediate cost savings... Which wall street loved... But at the cost of low employee moral.... And therefore reduced customer service...
I too feel bad for the employees of DL.. But not for the company.....



Wally Bird Ruled the Skys!
User currently offlineN754pr From , joined Dec 1969, posts, RR:
Reply 18, posted (10 years 6 months 1 week 2 days 22 hours ago) and read 2263 times:

How the hell are DL and UA still flying??

User currently offlineYyz717 From Canada, joined Sep 2001, 16307 posts, RR: 56
Reply 19, posted (10 years 6 months 1 week 2 days 21 hours ago) and read 2199 times:

DL's pilots are only part of the cost problem. All DL employee groups have lower productivity and higher pay than the LCC's. Indeed, if the CEO Grinstein and CFO Burns are paid more than their counterparts at AirTran, then they too are overpaid.




Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlineDeltaGuy From , joined Dec 1969, posts, RR:
Reply 20, posted (10 years 6 months 1 week 2 days 21 hours ago) and read 2180 times:

DL's pilots are only part of the cost problem. All DL employee groups have lower productivity and higher pay than the LCC's. Indeed, if the CEO Grinstein and CFO Burns are paid more than their counterparts at AirTran, then they too are overpaid.

Roger that.....Leo wasn't good for much lately, and Gerry isn't either....he'll be praised for "fixing" the airline, but he was brought in to bring the pilots down. He's definately not a replacement, more of a standin...I'd like to see what he's doing well. And he still makes far more than the pilots do...so does that windbag Michelle.

“no deal with the pilots if it doesn’t allow for a competitive cost structure”.

Like the 14% something and waiving of the 4.5% increase? It's like "we wont take what you're offering until it's up to our mark"....at least take what you can get.

I love DL...but management makes me think twice sometimes...
DeltaGuy


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