CHICAGO – Delta Air Lines , the No. 3 U.S. carrier, and smaller America West extended airlines' financial losing streak in the fourth quarter Thursday, stacking up a combined net loss of nearly $800 million on sharp declines in revenue following the Sept. 11 attacks.
Revenue at both airlines fell about 30 percent as people stopped flying altogether or paid very low fares after the attacks on New York and Washington.
"These results clearly reflect a year of challenges unlike any we've seen in the history of aviation," said Leo Mullin, Delta's chairman and chief executive officer.
Seven of the top eight U.S. airlines have now reported fourth-quarter results, notching up an aggregate net loss of $2.90 billion, including the one and only profit, from Southwest Airlines , of $64 million.
Even without UAL Corp. , which will release figures Friday, the net loss from the major airlines is already greater than the third quarter's $2.46 billion. Both periods include all cash grants from the federal government's $15 billion industry bailout package and a variety of charges for aircraft writedowns, severance packages and other items.
Delta, based in Atlanta, reported a fourth-quarter net loss of $734 million, or $5.98 per share, compared with a profit of $18 million, or 12 cents per share, a year earlier.
That included $288 million in federal cash aid along with a laundry list of other gains and charges.
OTHERS HAVE BIGGER LOSSES
Delta's net loss was in the range of the $798 million reported recently by bigger rival AMR Corp. , the world's largest airline and parent of American Airlines and TWA, but below the $1 billion loss recorded at smaller US Airways Group Inc. , the No. 6 U.S. carrier.
Excluding special items, Delta's loss was $3.97 per share or $486 million. Revenues fell to $2.9 billion from $4.0 billion in the year-ago quarter.
Phoenix-based America West, a unit of America West Holdings Inc. , posted a fourth-quarter net loss of $61 million or $1.81 per share on revenues of $400 million. It is the eighth largest in the country.
America West Chief Executive Douglas Parker said his airline, on the verge of a Chapter 11 bankruptcy filing before getting federal loan guarantees to back a private sector loan of $429 million, is back on track.
"This airline's operations are now fixed and we are running as good or better an airline as anyone in the country," Parker told reporters and analysts on a conference call.
Despite the staggering losses, most airlines' figures are actually in line with or even better than Wall Street has predicted. That has continued to push airline stocks higher since a late 2001 rally. Some carriers' share prices have seen double-digit gains since the Sept. 11 lows.
No. 5 Continental Airlines and several smaller carriers are forecasting a profit by the second quarter of 2002. Mullin, however, was more conservative and pinpointed Delta's second half to be in the black.
WATERSHED YEAR
Like the rest of the industry, Delta and America West are suffering since the Sept. 11 attacks sharply cut demand for travel. Even when passengers are flying, they are paying much less for tickets, although airlines are reporting that trend is starting to make a slight turn.
"Yields are not good," Delta Chief Financial Officer Michele Burns told Reuters in an interview. "We've seen an improvement in traffic but not in yields."
Yield is a widely watched industry benchmark that measures the fare levels customers are really paying, after factoring in fare sales, Internet discounts and corporate deals.
Mullin, a former banker who took on a prominent role in pushing for the federal airline bailout package after Sept. 11, said he does not foresee any airline mergers soon if traffic continues to rebound in the first quarter.
Mullin also said the airline industry is in the initial stage of a recovery after the Sept. 11 crisis, but he sees difficult months ahead.
Shares of Delta were slightly higher Thursday afternoon on the New York Stock Exchange, gaining 8 cents or 0.08 percent to $31.65. America West was down 3 cents to $3.95, paring early losses.
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