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.

FMI: www.delta.com