Delta Air Lines posted a first quarter loss of $256 million, but company officials say the carrier expects to post a profit by the end of the second quarter.
The loss was narrowed by nearly 70% from the same period a year ago. Operating revenue was up 2% to $6.8 billion.
"We are encouraged by the improvements we continue to see in the revenue environments," says Delta CEO Richard Anderson. "We expect the positive revenue trends to continue and to be solidly profitable in the June quarter."
First quarter losses were attributed in part to a bad weather and ongoing restructuring costs. February storms cost the carrier $65 million in lost revenue and expenses related to the merger with Northwest Airlines were $46 million.
As an aside, Delta says the volcanic cloud that has shut down European airspace forced it to cancel 400 flights at a cost of an estimated $20 million. Delta president Ed Bastian says the carrier was to operate about half of its normal flights today and all its US to Europe flights tonight.
Delta generated $1 billion in operating cash flow during the first quarter with $5.6 billion in unrestricted liquidity. Total operating expenses were down 5% and the airline posted an operating profit of $68 million.
Anderson says Delta is seeing an improvement in corporate revenues and he expects that trend to continue in what he sees as a rebounding of the economy. "We're seeing corporate travel improve across almost all geographies," he says.
One of the highlights of the first quarter was the full integration of Northwest and Delta flights, ticketing and operational systems into a single platform.
Anderson says the current "business environment" has changed since the Northwest merger was approved by the US Department of Justice (DOJ). Approval for a slot transaction with US Airways has been pending longer than it took for the merger approval.
When asked if Delta is considering another acquisition, Anderson declined to answer, saying he "would not take the bait".
Source: Air Transport Intelligence news
