The worldwide economic downturn and rising cost of fuel hit Delta Airlines which is reporting losses of $1.04 billion for its second quarter.
Its competitor America Airlines, meanwhile, reported losses of $1.45 billion. The company actually made a profit of $317 million in this period last year. However the airline’s loss included one time charges and it added that without these it would have only lost $248 million.
Delta reported losses of $1.04 billion but that included one-time charges of $1.2 billion. Excluding those charges the airline said it would have had a net income of $137 million. In the same period last year it made a $1.59 billion profit.
“It was better than we thought — quite a bit better,” Michael Derchin, an analyst for FTN Midwest Securities told The New York Times of the news on Delta.
“Nobody ever paid attention to other revenue up until now,” the analyst added, saying that passenger fees were $170 million more than he had expected. “That’s one we haven’t got a handle on yet.”
Delta, which in April agreed to merge with Northwest, said its revenue rose 10 per cent to $5.50 billion from $5 billion in the period a year earlier.
The airlines have been hit hard by oil prices, which have more than doubled since last year and Delta predicts that it will pay an extra $4 billion on fuel this year.