NEW YORK – Delta Air Lines Inc. (DALRQ) on Thursday reported a net loss of $1.1 billion for its third quarter on restructuring charges as the carrier canceled aircraft leases as it sought to reorganize in bankruptcy court.
The third largest U.S. airline, which sought bankruptcy protection in September under pressure from energy costs, low cost rivals and a high debt load, reported a net loss of $646 million a year earlier.
While Delta's loss narrowed, excluding $692 million in one- off charges, the airline was still in the red even on an operating basis, illustrating the hurdles it still faces as it seeks to regain profitability.
"We must stop using borrowed money to fund our losses, Delta's Chief Financial Officer Edward Bastian said in a statement.
The airline is seeking to cut some $3 billion in costs, about a third of which would come through wage and benefit cuts. Delta also plans to cut up to 9,000 jobs and shrink its fleet by up to 100 aircraft as part of its turnaround plan.
"What is meaningful is what they're doing now in bankruptcy," said Calyon Securities analyst Ray Neidl, adding that the results were roughly in line with his expectations.
The loss in the most recent period included a $607 million charge for reorganization items, including the cancellation of 40 aircraft leases, as well as the write-off of debt issuance costs and discounts.
It also included an $86 million settlement charge related to lump sum pension payments to about 250 pilots who retired.
Excluding one-time items, Delta posted a loss of $438 million, narrower than the $592 million figure a year earlier.
The airline's operating loss, which excludes interest and other financial costs, narrowed to $240 million from $423 million as fuel costs surged by $442 million from a year ago.
Delta said its operating revenues rose 8.1 percent to $4.21 billion.
The Atlanta-based airline said that, as of September 30, it had $2.6 billion in cash and cash equivalents on hand, of which $1.4 billion was unrestricted.