$415 Million Loss Blamed on Pilot Retirements

Delta Air Lines has admitted that its fourth-quarter loss would be at least 50 percent larger than feared. The additional losses are being blamed on charges billed to Delta's pension plan, due to an increase in recent pilot retirements. According to Delta officials, some 620 pilots retired in the year preceding the end of September, a number twice as large as the average computed over the last three years.

Battling tough negotiations with its pilots over the latest round of contracts, Delta claims that a $140 million noncash charge due to these retirements pumps up its forecast loss from $365 million to $415 million. Previously; Delta had hinted that its loss for this quarter would be far less troublesome... in the neighborhood of $225 million to $275 million (which still seems like a very troublesome neighborhood tho those of us at ANN.... who work with 'slightly' smaller budgets).

CFO Michele Burns also blamed part of the loss on higher than expected costs due to a "significant drop" in interest rates in late September... which drove the aggregate pension costs higher. Delta had previously forecasted that its 2004 pension costs would be between $350 million and $450 million.

FMI: www.delta.com