Thu, Apr 15, 2004
This Time: $383 Million In The Red
Here come those tears again -- the
tears investors in Delta Airlines have now shed for the past 13
straight quarters. Delta lost money again during the first quarter
of 2004 -- $383 million -- and warned this can't go on much
longer.
"This was a disappointing quarter for Delta, and there are more
challenging times ahead," said a statement from Chief Executive
Gerald Grinstein. "Continued losses of this magnitude are
unsustainable. The urgent task is to achieve a competitive cost
structure so that Delta can generate a positive cash flow, reduce
its debt burden and return to profitability."
Compared with the same time a year ago, Delta's numbers were
only marginally better this time around. Costs were down 3.6
percent while revenue was up 4.3 percent. That made the bottom line
a little better, but no easier to swallow.
So, how will Delta shed its reputation as one of the costliest
airlines to run in all of commercial passenger aviation? The
obvious answer is to cut costs. And if Delta pilots are getting a
little nervous about that, consider that they are the highest paid
in the industry.
But negotiations between the airline and its ALPA pilots have
not gone well. Delta is asking for mid-contract concessions. The
union responded with a small concession on current salaries and an
offer to forego a raise scheduled for May. The two sides appear to
be a long, long way apart.
As ANN has reported, that's led to talk of the "B" word at
Delta's front office. But industry experts say such a move could
still be more than a year away.
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