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…Posts $256m Q1 loss, sees profitable Q2

Delta Airlines has posted a first quarterly loss of $256 million as business traffic began to recover and said it expects a profit in the second quarter.

The world’s biggest air carrier said it expects improved revenue trends even as the industry faces fresh travel disruptions in Europe from ash spewed from an Icelandic volcano.

The company’s first_quarter loss narrowed came down from $794 million a year earlier.
Operating revenue rose two percent to $6.85 billion, despite a $65 million hit from flight cancellations tied to snowstorms earlier this year.

According to the airline, operating expenses fell 5 percent, helped by an 11 percent drop in fuel costs and merger savings.

Analysts expected revenue of $7 billion.Airlines have cut jobs and reduced capacity in the past two years as the economic downturn battered demand for air travel.

In recent months, US carriers have noted that business demand was picking up.At Delta, passenger revenue rose 4 percent in the first quarter, while unit revenue climbed 8 percent from the year earlier, helped by fuller planes.

“We are encouraged by the improvements we continue to see in the revenue environment.  We expect the positive revenue trends to continue and to be solidly profitable in the June quarter,” Delta Chief Executive Officer, Richard Anderson said.

Delta became the world’s biggest air carrier when it bought Northwest in 2008, and could lose its top ranking should two of its US rivals, United Airlines and Continental, merge.

Observers believe that a combined United_Continental would surpass Delta, but none of the carriers has confirmed the talks.


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