Delta Air Lines lost $168 million in the second quarter as an aggressive fuel hedging strategy backfired amidst falling oil prices.
The Atlanta-based carrier accumulated $754 million in special charges in the quarter ending 30 June, including a $561 million charge on mark-to-market adjustments on fuel hedges settling in future periods. Delta also charged $171 million in severance costs and $22 million for special fleet and facilities expenses.
The special charges overwhelmed an otherwise "solid" revenue performance as compared to normal expenses, says Delta chief executive Richard Anderson.
Operating revenues improved by 6% to $9.73 billion despite a 1.3% drop in capacity, compared to the same period a year ago.
Total expenses rose 11% over the same period to $9.6 billion, driven by a 24% in the carrier's hedged fuel costs and related taxes.