Delta, UAL post 1Q losses amid slumping air travel

22 April 2009

Delta Airlines and United Airlines' parent UAL Corp, reported first-quarter net loss due to the sharp intensification of recession in the US and in major economies around the world making customers limit their air travel.

Delta, the world's largest airline, reporting its first quarterly result after its merger with Northwest Airline in October, said that its first-quarter loss was $794 million compared to its $6.4-billion loss in first-quarter of 2008.

Reporting its sixth consecutive quarter loss, Delta said that the combined operations of Delta and Northwest decreased 12.6 per cent in the first-quarter 2009 compared to a 7.9 decrease in capacity in March 2008.

Domestic traffic decreased 11.1 per cent year over year while international traffic decreased 15.1 per cent year over year but revenue for the both the airlines rose almost 40 per cent to $6.7 billion.

While the Q1 figures are for the  Delta and Northwest, the last year's 1Q figures are for the pre-merger Delta operations.

The Atlanta-based airline said that it had incurred a one-time cost of nearly $100 million, which includes $50 million for severance payments to employees who took buyouts in January and $49 million for merger-related expenses but the result excluded $684-million loss derived out of fuel hedge losses.