APRIL 23, 2007 -- Delta Air Lines today said it is narrowing the gap to profitability, reporting a $130 million net loss—$6 million excluding special items...
APRIL 23, 2007 -- Delta Air Lines today said it is narrowing the gap to profitability, reporting a $130 million net loss—$6 million excluding special items—compared with a 2006 Q1 $2.1 billion loss in the first quarter of 2007. Thanks largely to growth in international revenue, Delta achieved a $155 million operating profit during what it plans to be its last quarter under bankruptcy protection.
Delta COO Jim Whitehurst today during the carrier´s first-quarter earnings call said passenger revenue for the quarter grew 6.5 percent amid a capacity increase of 2 percent. The carrier´s capacity and revenue mix continues to shift in favor of international business. Whitehurst noted that domestic revenue was flat, despite having 5 percent less U.S. capacity than it did in the same period last year.
International capacity, meanwhile, grew 24 percent, year over year, and represented 31 percent of Delta´s total capacity for the quarter. International revenue grew 34 percent for the first quarter of this year over last year´s. Delta forecasts domestic capacity this year to be down 2 percent to 4 percent, following last year´s 13 percent reduction.
Whitehurst today said Delta on March 30, 2008, seeks to add Heathrow to its growing roster of international destinations, saying that serving the route from New York´s John F. Kennedy International Airport and Atlanta would help the carrier "compete effectively on corporate accounts." Whitehurst said Delta is working with its SkyTeam partners and other carriers to secure slots at Heathrow and begin service the day the U.S.-EU Open Skies treaty takes hold. Whitehurst said Delta management is "confident we´ll be able to get the slots we need."
Delta last week said more than 95 percent of creditor ballots showed support for its reorganization plan. CEO Gerald Grinstein—who is expected to step down following the carrier´s Chapter 11 exit—said the creditor support "sets the stage for our confirmation hearing, scheduled for Wednesday this week, April 25. We are confident that the process will move smoothly toward Delta´s emergence from bankruptcy on April 30."