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Allegedly Delta Has $5 Billion Loss in 2004



 
 
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Old January 21st, 2005, 01:14 AM
Robert Cohen
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Default Allegedly Delta Has $5 Billion Loss in 2004

www.ajc.com

business page

cookie registration hassle, but it's a fine newspaper nevertheless (imho)

Air Tran etal have been eating Delta's lunch, supper and breakfast

Some idiotic-cheapos (yours truly, once) had been known to "drive from the
Atlanta area to Birmingham" to $ave (a hundred or whatever) by going to the
west/Seattle on Southwest (which doesn't go to Atlanta nor to Greenville,
S.C.)




  #2  
Old January 21st, 2005, 03:16 AM
Robert Cohen
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as Senator Wonderful Political B.S. Orator Dirksen said: "a billion here, a
billion there, and soon that amounts to real money"

copyrighted by atlanta journal constitution 2005

www.ajc.com

http://www.ajc.com/business/content/...5/20delta.html

Delta losses continue
Quarter's net red ink : $2.2B, thanks to special charges

By RUSSELL GRANTHAM
The Atlanta Journal-Constitution
Published on: 01/20/05
A lot has changed since Delta Air Lines skirted bankruptcy last fall. But one
thing hasn't: red ink.

In its first financial update since winning pilot pay cuts and announcing other
turnaround moves, Delta Thursday reported a fourth-quarter loss of about $2.2
billion, for a net loss for the year totaling $5.2 billion.

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Both the fourth quarter and annual loss numbers were inflated by huge non-cash
charges related to restructuring moves. Such charges reflect the carrier's
financial struggles, but do not mean the company is losing that much from daily
operations. The charges were $1.4 billion in the fourth quarter and $2.9
billion for the full year.

Excluding such charges, the fourth quarter loss was $780 million, slightly
worse than expected. The full year loss was $2.3 billion when not including the
special charges.

Delta also said it ended the year with $2.1 billion in cash, $1.8 billion of it
unrestricted. That marks a rebound from last fall when cash dipped below $1.5
billion, the level at which analysts say a bankruptcy filing becomes more
likely. Delta added to its coffers by borrowing $811 million from GE Commercial
Finance and American Express's travel arm.

Higher fuel costs hammered Delta in the fourth quarter, as it paid an average
of $1.42 per gallon of jet fuel, up 68 percent from a year earlier. That led to
a nearly 7 percent rise in how much it costs Delta to fly one seat one mile,
despite the company's cost-cutting efforts. Meanwhile, the amount of revenue
the airline gets from each seat flown one mile dropped about 5 percent..

"These numbers show clearly the difficulties our airline will continue to face
in 2005," CEO Gerald Grinstein said. "At the same time Delta made important
progress toward our transformation goals.".

Grinstein, in a memo to workers this week, said Delta passed "through the eye
of the needle" in 2004 and can now focus on new turnaround strategies.

"Though we still are not out of the woods," he said, management is making
changes "to transform Delta into the right airline for the new era."

As an example, he said, Delta "rocked the industry" with its recent fare
overhaul, showing an ability to "take the offensive and begin shaping industry
direction, rather than simply responding."

Grinstein said Delta's ability to boost its service image may hinge on smooth
execution of a massive schedule overhaul at the end of this month. Dubbed
"Operation Clockwork," it includes boosting daily flights at the Atlanta hub to
1,051, from 970 now.

Industrywide losses

Analysts don't expect Delta's turnaround plan — most of which hasn't kicked
in yet — to appreciably shrink its losses for months. The current consensus
is that Delta will lose an additional $500 million or so through March, and
more than $700 million this year.

Delta isn't alone in enduring stubborn losses.

(this long & sad article continues at www.ajc.com)







 




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