Substantial challenges from "unprecedented revenue declines and volatile fuel prices" are being cited by Delta Air Lines as the driver behind its second quarter net loss of $257 million.
But the Atlanta-hubbed carrier, which boasted $5.4 billion in unrestricted liquidity at 30 June, is assuring shareholders it is "the best positioned network carrier" to weather today's tough economic conditions.
"Delta has more flexibility and a proven track record of acting quickly to adapt our business to economic challenges. We continue to focus on cost discipline and preserving liquidity, while adjusting our fleet and network and accelerating merger benefits," says Delta CEO Richard Anderson.
The carrier saw second quarter revenue grow 27% year-over-year to $7 billion as a result of its merger with Northwest Airlines. Delta does not include in its financial results the results of Northwest prior to the completion of the merger. It points out that total operating revenue on a combined basis declined $2.1 billion, or 23%, and total unit revenue (RASM) declined 17%.
Expenses rose 6% to just shy of $7 billion. This includes an 8% increase in fuel. Delta lists its second quarter operating income as $1 million.
Despite these challenges, the carrier is touting its cash position. It generated $834 million of cash from operations in the June quarter, "allowing us to fund our debt obligations, make investments in our business, and increase our liquidity position", says Delta CFO Hank Halter.
"In addition, the hard work of the Delta people in achieving merger synergies and their focus on cost discipline resulted in a consolidated non-fuel CASM increase of only 2% compared to the prior year on a 7% capacity reduction."
Source: Air Transport Intelligence news
