Yeah, That Merger Is Working Great So Far...

The merger of Delta Air Lines and Northwest Airlines was meant to bring cost savings and profitability... but so far, that hasn't happened.

Delta reported Tuesday it lost $1.4 billion in the 4th quarter of 2008... far worse than the carrier's $70 million, pre-merger loss for the same time frame in 2007 (nevermind the relatively paltry $8 million net loss Northwest claimed for Q4 2007 -- Ed.)

About $904 million of that figure was blamed on one-time charges to provide employees with stock promised in connection with Delta's acquisition of Northwest, which was approved by the Department of Justice in October 2007. The airline also reported taking a $607 million hit in the quarter due to fuel hedging, which prevented it from taking advantage of the plunge in oil prices.

The Associated Press reports analysts had expected a better showing. In 2007's 4th quarter, Delta lost 18 cents per share; one year later, the loss was $2.11 per share. Even without the one-time charges for stock issues and fuel hedges, the company lost $340 million, or 50 cents a share. Analysts had predicted 34 cents.

Those same analysts now say Delta will report another loss in the current quarter, but be profitable the rest of the year. CEO Richard Anderson is bullish, noting cuts in capacity and workforce size planned for 2009.

"Despite the difficult economic environment, we expect to be solidly profitable in 2009 driven by lower fuel costs, capacity discipline, and merger synergies," he said. "Delta people have a great track record for achieving their goals, and I am confident that 2009 will be another successful year."

Um... another one?

FMI: www.delta.com