Delta Reports Loss On Fuel Costs

Delta Air Lines reported a wider-than-expected third-quarter loss on Wednesday as it faced more than USD$800 million in extra fuel bills due to the spike in oil prices during the quarter.

"Fuel dropping like a rock is a big offset to the economy," said Delta chief executive Richard Anderson.

He added that Delta is "well positioned to weather the turmoil in the market," and did not need to tap tight credit markets in the near future to fund aircraft deliveries.

Although the price of oil has returned to the same level as a year ago, around USD$76 per barrel, it jumped to a record-breaking USD$148 over the summer. That dashed airlines' hopes of a third-quarter profit, but results are expected to improve if oil stays at current levels.

Delta said it is expecting a small loss in the fourth quarter, and is already starting to see "a little bit of demand softening" in its lucrative international business. But analysts are still forecasting a return to profit for the industry next year.

Delta increased operating revenue by 9 percent, to USD$5.7 billion, even though it reduced its flying capacity in the quarter, helped by strong trans-Atlantic business, higher fares and more fees. But the airline's operating costs increased USD$814 million, or 17 percent, almost entirely due to higher fuel.

For the full year, Delta expects passenger unit revenue to rise 7 to 9 percent as it cuts flights and raises fares. It is expecting domestic capacity to fall 8 to 10 percent for the year, and capacity on its more lucrative international routes to rise 14 to 16 percent.

(Source: airwise.com 10/15/08)

 

Southwest Reports Net Loss Due To Fuel Hedges

Southwest Airlines reported a quarterly net loss on Thursday, reversing a year-ago profit, on charges related to its fuel hedging.

The low-cost airline's third-quarter net loss amounted to USD$120 million, compared with a profit of USD$162 million a year earlier. Excluding one-time items, Southwest earned USD$69 million.

The airline industry has been severely battered this year by high fuel costs that peeked at a record high in July before falling rapidly.

Southwest, whose fuel hedges are the envy of the industry, was somewhat insulated from the spike in fuel prices but reported charges of USD$247 million related to adjustments on a portion of the future period of its hedge portfolio.

The airline's revenue rose about 12 percent to USD$2.9 billion. The company ended the quarter with USD$3.4 billion in cash and short term investments.

(Source: airwise.com 10/16/08)

Delta Ready to Go Toe-to-Toe With AirTran

Delta could be ratcheting up its head-to-head competition with rival AirTran. Both carriers operate large hubs from Atlanta. The Atlanta Journal-Constitution writes Delta "is concentrating its growth in Atlanta on markets where it competes head-to-head with AirTran Airways, according to a report from Credit Suisse analyst Daniel McKenzie." The report adds that makes it "increasingly evident that Delta has identified the worsening macro backdrop as an opportunity to crack down" on AirTran.

If true, The Wall Street Journal's Middle Seat Terminal blog writes "for the first quarter of 2009, Delta's scheduled capacity growth in AirTran markets represents a 10% increase, year-over-year. Compare that 10% growth rate to the 4.4% bump Delta plans for markets where the Atlanta-based carrier doesn’t compete with AirTran." The Journal's blog also notes that Delta's move "could be seen as an effort to regain territory it may have lost to the Orlando-based discount carrier" during AirTran's period of rapid growth.

(Source: usatoday.com 10/17/08)

 

Continental Reports Quarterly Loss, But Beats Expectations

 

Continental Airlines this morning reported a third-quarter loss of $236 million ($2.14 per share). Reuters writes "excluding some one-time items, it reported a loss of $1.32 per share. That was narrower than the $1.55 per share loss Wall Street was expecting, according to Reuters Estimates." Continental reported a profit of $241 million ($2.15 per share) during the same quarter a year ago. Discussing this year's results, The Associated Press notes Hurricane Ike cost the carrier about $50 million in operating profit after forcing Continental to shut down its Houston hub for more than two days in September. "And the carrier had to contend with a 68% spike in fuel costs to $1.5 billion during the quarter, as crude prices flirted with $150 a barrel mark in July," AP adds. AP says "Continental's strategy of hedging against high oil prices backfired when oil prices tumbled later in the period. The company said it recognized $63 million in fuel-hedging losses, but is still $78 million ahead for its hedging this year." Elsewhere, Continental says it will delay the delivery of 18 jets from Boeing. Two Boeing 777s will now be delivered in 2010, instead of next year. The Wall Street Journal adds Boeing and Continental also "reached an agreement in principle … to reschedule 16 deliveries set for the next two years. The deliveries will now take place no sooner than 2011."

 

(Source: usatoday.com 10/15/08)

 

Updated Delta Administrative Fees – Effective 4/1/08

 

Change Penalty for domestic nonrefundable fares             $100

*applies to reissues, cancellations & exchanges

 

Direct Ticketing Charge                                                  $25

 

External Reissue Charge                                                $30

 

Curbside Check-in (Sky Caps)                                        $3 per checked item

 

Unaccompanied Minor Fee                                             $100 flat rate

 

Checked Bag Fee                                                          $50

*applies to second checked bag

 

Oversize Baggage Fee                                                   $150 each way

 

Pets in Cabin                                                                 $100 each way

 

Pets as Checked Baggage                                             $200 each way

 

Plastic Bag Fee (for gate checked strollers/car seats)       $5 per

 

(Source: Delta Travel Professionals e-mail blast 4/1/08)

 

A US Airways pilot has been removed from flight duty after he accidentally discharged his handgun in the cockpit during a flight on Saturday.

The shot was fired as the plane was at 8,000 feet on approach to Charlotte, North Carolina. The bullet penetrated the fuselage, but did not damage any crucial instruments or wiring, according to the Transportation Security Administration.

The pilot was carrying the gun under the Federal Flight Deck Officer program, which has trained thousands of pilots to carry weapons to increase aviation safety. Saturday's incident was the first case of an accidental firing.

A US Airways pilot has been removed from flight duty after he accidentally discharged his handgun in the cockpit during a flight on Saturday.

The shot was fired as the plane was at 8,000 feet on approach to Charlotte, North Carolina. The bullet penetrated the fuselage, but did not damage any crucial instruments or wiring, according to the Transportation Security Administration.

The pilot was carrying the gun under the Federal Flight Deck Officer program, which has trained thousands of pilots to carry weapons to increase aviation safety. Saturday's incident was the first case of an accidental firing.

 

A US Airways pilot has been removed from flight duty after he accidentally discharged his handgun in the cockpit during a flight on Saturday.

The shot was fired as the plane was at 8,000 feet on approach to Charlotte, North Carolina. The bullet penetrated the fuselage, but did not damage any crucial instruments or wiring, according to the Transportation Security Administration.

The pilot was carrying the gun under the Federal Flight Deck Officer program, which has trained thousands of pilots to carry weapons to increase aviation safety. Saturday's incident was the first case of an accidental firing.

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