Heavy Losses Cripple Delta, American | Aero-News Network
Aero-News Network
RSS icon RSS feed
podcast icon MP3 podcast
Subscribe Aero-News e-mail Newsletter Subscribe

Airborne Unlimited -- Most Recent Daily Episodes

Episode Date

Airborne-Monday

Airborne-Tuesday

Airborne-Wednesday Airborne-Thursday

Airborne-Friday

Airborne On YouTube

Airborne-Unlimited-10.28.24

Airborne-NextGen-10.29.24

Airborne-Unlimited-10.30.24

Airborne-Unlimited-10.24.24

Airborne-Unlimited-10.25.24

Fri, Jan 21, 2005

Heavy Losses Cripple Delta, American

AMR Defers Delivery Of 54 Boeing Aircraft

The financial situations at both American and Delta just aren't getting any better. At Delta, a fourth quarter loss of $2.2 billion made 2004 the airline's worst-ever. At American, continued losses have forced the carrier to forego 54 of 56 aircraft ordered from Boeing. The trickle-down economics of aviation have, for these airlines, become torrents of red ink. And yet, through it all, low-cost carrier Southwest continues to profit.

Delta Loses $5.2 Billion In '04

In spite of the ongoing efforts to trim costs through negotiations with its various labor groups, Delta lost $5.2 billion in 2004 -- but that number may be a little misleading. If you exclude the costs of restructuring -- one time charges reflected in the fourth quarter -- Delta lost $780 million in the last three months of the year.

Still, fuel charges were up at least 68-percent from the year before, as Delta paid an average $1.42/gallon for go-juice.

And yet...

Delta CEO Gerald Grinstein told employees this week that the airline had "through the eye of the needle," according to the Atlanta Journal-Constitution. "These numbers show clearly the difficulties our airline will continue to face in 2005. At the same time Delta made important progress toward our transformation goals."

Grinstein (above) continued: "Though we still are not out of the woods," management is making changes "to transform Delta into the right airline for the new era."

American Defers Huge Boeing Order

Those fast-rising fuel prices caused problems industry-wide in 2004. AMR, the parent corporation of American Airlines, cited the massive rise in fuel costs as the major reason it lost $387 million in the fourth quarter. Fuel costs for American were $1.1 billion more in 2004 than they were the year before.

"As expected, the fourth quarter proved to be a disappointing end to a very difficult year," said American CEO Gerard Arpey. AMR's results for the fourth quarter of 2004 reflect the economic woes that plagued the airline industry throughout 2004, in particular, high fuel prices and a tough revenue environment."

Because of the continued loss in 2004, American now says it will defer the purchase of 54 Boeing aircraft scheduled for delivery between now and 2007. There was no immediate comment from Boeing.

Like his counterpart at Delta, Arpey (above) did see a glimmer of optimism in the fourth quarter numbers. "The issues we are grappling with are not new to us, and in fact, in 2004 we made a lot of headway in addressing them," he said. "The productivity of our people, and of our fleet, is higher than it has ever been. We are running a smarter, more efficient airline than we were a year ago. We have improved our performance relative to the rest of the industry on both the revenue and cost sides of the ledger."

Continental, Northwest Post Huge Losses

The nation's fifth-largest airline, Continental, which posted a $47 million profit in the fourth quarter of 2003, showed a loss in the last quarter of $206 million.

Northwest also posted a huge loss -- even bigger than American's -- at $402 million in Q4.

Meanwhile, At Love Field In Dallas...

Southwest Airlines says its net income for fourth quarter 2004 was $56 million.

The Company also reported its 32nd consecutive year of profitability, with annual net income of $313 million, or $.38 per diluted share, compared to 2003 net income of $442 million, or $.54 per diluted share. Excluding last year's government grant, 2003 net income was $298 million, or $.36 per diluted share.

"I am very proud of our employees and their strenuous efforts to lower our cost structure," said CEO Gary Kelly (below). "Although our fourth quarter 2004 earnings declined 15.2 percent due to significantly higher energy costs, our unit costs, excluding fuel, declined 4.5 percent. As a result of our low cost competitive advantage and ongoing efforts to improve productivity, we have been able to offer the low fares our customers demand while sustaining our profitability and growing our route system during these difficult airline industry times."

The statement goes on, but, given what we read above, it would be sort of like rubbing salt in the wound.

FMI: www.delta.com, www.aa.com, www.southwest.com

Advertisement

More News

Senator Pushes FAA to Accelerate Rocket Launch Licensing

States That Current Process is Damaging National Aerospace Development US Senator Jerry Morgan is pushing the FAA to speed up the process for rocket launch licensing. He argues tha>[...]

Classic Aero-TV: RJ Gritter - Part of Aviation’s Bright New Future

From 2015 (YouTube Edition): Model Aviator Aims For Full-Scale Career While at the 2015 Indoor Electric RC Festival, referred to as eFest, ANN CEO and Editor-In-Chief, Jim Campbell>[...]

Aero-FAQ: Dave Juwel's Aviation Marketing Stories -- ITBOA BNITBOB

Dave Juwel's Aviation Marketing Stories ITBOA BNITBOB ... what does that mean? It's not gibberish, it's a lengthy acronym for "In The Business Of Aviation ... But Not In The Busine>[...]

ANN's Daily Aero-Linx (10.27.24)

Aero Linx: Cardinal Flyers Online The Cardinal Flyers Online Web site was created and is maintained by me, Keith Peterson. My wife Debbie and I have owned a 1976 RG since 1985. Wit>[...]

ANN's Daily Aero-Term (10.27.24): Clearance Void If Not Off By (Time)

Clearance Void If Not Off By (Time) Used by ATC to advise an aircraft that the departure release is automatically canceled if takeoff is not made prior to a specified time. The exp>[...]

blog comments powered by Disqus



Advertisement

Advertisement

Podcasts

Advertisement

© 2007 - 2024 Web Development & Design by Pauli Systems, LC