Delta Air Lines Reports First Quarter Results

Apr 18, 2001, 01:00 ET from Delta Air Lines, Inc.

    ATLANTA, April 18 /PRNewswire/ -- Delta Air Lines (NYSE:   DAL) today
 reported a net loss of $122 million and a diluted loss per share of $1.02 for
 the March 2001 quarter versus net income of $172 million and diluted earnings
 per share of $1.27 in the March 2000 quarter, excluding unusual items.
 Including unusual items, the March 2001 quarter net loss and diluted loss per
 share were $133 million and $1.11, respectively, versus net income of
 $216 million and diluted earnings per share of $1.61 in the March 2000
 quarter.
     "We faced several challenges in the first quarter of 2001," said Leo F.
 Mullin, Delta's chairman and chief executive officer.  "The slowing economy
 and pilot labor issues at Comair and Delta resulted in a loss for the first
 time in the last 24 quarters.  Because Delta's highest commitment, after
 safety, is to provide dependable air travel to our customers, we regret any
 inconvenience these issues may have caused our passengers.  I would like to
 express my sincere gratitude to employees at Delta, Comair, and Atlantic
 Southeast Airlines (ASA) who have worked so diligently to deliver the best
 possible customer service despite these difficulties," said Mullin.
     In a Form 8-K filed on March 13, 2001, Delta estimated lower operating
 revenue for the March 2001 quarter of approximately $100 million due to a
 reduced flight schedule and between $200 and $250 million as a result of
 weaker business traffic primarily associated with the slowing economy, from
 its expectation at the start of the year.  Delta estimated a net loss of $85
 to $110 million in the March 2001 quarter and estimated a diluted loss per
 share to be in the range of $0.70 to $0.90.  The diluted loss per share of
 $1.02, excluding unusual items, was higher than anticipated due to the Comair
 pilot strike, which began on March 26, 2001.  The strike reduced revenue and
 earnings per share by an estimated $24 million, pretax, and $0.12,
 respectively.
     In the March 2001 quarter, Delta's unit cost increased 9.4 percent over
 the March 2000 quarter, while non-fuel unit cost increased 8.4 percent,
 primarily due to the lower than originally planned increase in available
 capacity.  In order to increase its schedule reliability, Delta reduced
 planned capacity by 2.7 percent in the quarter, while retaining a portion of
 the expenses incurred prior to this decision.  Total operating expenses
 increased 10.9 percent while available capacity increased only 1.4 percent.
 Delta's fuel hedging program continued to help reduce the impact of high fuel
 prices, saving Delta approximately $106 million, pretax, in the quarter.
     As a result of the continued economic softness and public concern over a
 possible strike by Delta pilots, Delta anticipates that June 2001 quarter
 operating revenues will be negatively impacted by $300 to $350 million,
 excluding the impact of the Comair strike.
 
     Unusual Items
     In the March 2001 quarter, Delta recognized a $17 million non-cash, pretax
 charge to account for certain equity rights, primarily priceline.com, and fuel
 derivative instruments to comply with Statement of Financial Accounting
 Standard 133.  In the March 2000 quarter, Delta recorded a $73 million pretax
 cash gain from the sale of priceline.com stock.
 
     Labor Update
     Today, Delta will be meeting in Washington, D.C. with the Air Line Pilots
 Association (ALPA) and the National Mediation Board (NMB).  The meeting comes
 with 10 days left in the cooling-off period, set to expire at 12:01 a.m.
 Eastern Daylight Time on April 29, 2001.
     "Our ability to conclude these negotiations before the end of the cooling-
 off period on April 29 is dependent upon both parties' willingness to
 negotiate toward a settlement," said Mullin.  "We believe that we will reach
 an agreement which will provide industry-leading pay rates and other contract
 improvements to our pilots while protecting Delta's financial viability and
 competitiveness.  This may, however, require utilizing some portion of the
 extra 60 days provided by the Presidential Emergency Board process."
     Delta's current comprehensive proposal -- which would add approximately
 $2.0 billion in costs over the next four years -- would make our pilots the
 highest paid in the industry on the equipment they fly.  The estimated
 financial gap between Delta's offer and ALPA's proposal is approximately $1.7
 billion.
     President Bush has said that he would take the necessary steps to prevent
 strikes at major airlines this year because of the severe disruption to the
 traveling public and to the economy that a strike would cause.
     Separately, operations at Delta's wholly owned subsidiary Comair remain
 suspended due to a strike by Comair pilots, who are also represented by ALPA.
 Comair is committed to reaching an industry-leading agreement as quickly as
 possible and is ready and willing to resume negotiations on a contract that
 balances the needs of customers, employees, and shareowners.
 
     Online Leadership
     Online sales at Delta's Web site, delta.com, continue to grow. For the
 March 2001 quarter, revenue from these ticket sales totaled $265 million,
 which is a 25 percent increase over the December 2000 quarter and 70 percent
 higher than the same period last year. Revenue on delta.com represents 7
 percent of Delta's passenger revenue.  Delta's Web site was recently
 recognized by Business 2.0 magazine as the most user-friendly B2C site on the
 Web.  Revenue from all online channels now represents 12 percent of Delta's
 passenger revenue.
 
     Network Highlights
     On March 21, Delta, Air France, Aeromexico, and Korean Airlines welcomed
 CSA Czech Airlines as the newest member of the  SkyTeam alliance.  CSA brings
 an additional European partner to SkyTeam with its international hub in
 Prague, complementing Air France's operations in Paris.  SkyTeam's Prague hub
 will provide an increase in travel destinations for passengers traveling
 through Central and Eastern Europe and the Middle and Far East.
     During the quarter, Delta also announced new service beginning this summer
 from New York's John F. Kennedy (JFK) International Airport to Cairo, Dubai,
 and Tel Aviv and the first ever international service using a Delta aircraft
 from Boston's Logan International Airport to London's Gatwick Airport.  In
 addition, Delta began its first nonstop service from JFK to Tokyo on April 1,
 2001.
     Delta Express, Delta's low-fare operation, announced new service from
 Chicago's O'Hare International Airport to Orlando and Ft. Lauderdale;
 Hartford/Springfield to Tampa; Providence to Ft. Lauderdale; and Indianapolis
 to Ft. Lauderdale and Ft. Myers.  To provide easier access to Delta's low-fare
 flights to Florida, Delta Express launched a new web address -- flydlx.com.
 
     Number 1 in Customer Service
     Delta has been ranked Number 1 in customer service in a joint study by the
 Aviation Institute at the University of Nebraska at Omaha and the National
 Institute for Aviation Research at Wichita State University.  The study is
 based largely on U.S. Department of Transportation operating and customer
 service statistics.  "Even against a backdrop of operational challenges, we
 have demonstrated our ability to serve our customers well and better than any
 of our competitors -- both in the air and on the ground," said Vicki Escarra,
 executive vice president -- customer service.
     Delta will host a webcast to discuss its quarterly earnings today, April
 18, at 10:00 a.m. Eastern Daylight Time.  The webcast is available via the
 Internet at www.delta.com/inside/investors/index.jsp .
     Delta's goal is to become the No. 1 airline in the eyes of its customers,
 flying passengers and cargo from anywhere to everywhere.  People choose to fly
 Delta more often than any other airline in the world on 5,183 flights each day
 to 354 cities in 65 countries on Delta, Delta Express, Delta Shuttle, Delta
 Connection carriers, and Delta's Worldwide Partners.  Delta is a founding
 member of SkyTeam, a global airline alliance which provides customers with
 extensive worldwide destinations, flights and services.  For more information,
 visit Delta at delta.com .
     Statements in this Press Release, which are not purely historical facts,
 including statements about our expectations, beliefs, intentions, or
 strategies for the future, may be "forward-looking statements" as defined in
 the Private Securities Litigation Reform Act of 1995.  Forward-looking
 statements involve risks and uncertainties that could cause actual results to
 differ materially from historical experience or our present expectations.
 Factors that could cause these differences include, but are not limited to,
 general economic conditions; competitive factors in our industry; including
 mergers and acquisitions; outcomes of negotiations on collective bargaining
 agreements; changes in aircraft fuel prices; disruptions to operations due to
 adverse weather conditions, air traffic control-related constraints and labor
 matters such as the duration of the Comair pilot strike and a possible strike
 by Delta pilots; fluctuations in foreign currency exchange rates; governmental
 actions; the willingness of customers to travel generally and with us
 specifically; and the outcome of our litigation.  Caution should be taken not
 to place undue reliance on our forward-looking statements, which are current
 only as of the date of this Press Release.  More detailed information about
 risks and uncertainties as of other dates can be read in Delta's past and
 future Forms 10-K and 10-Q and certain Forms 8-K filed with the Securities and
 Exchange Commission.
 
 
                               DELTA AIR LINES, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                   (Unaudited; In Millions, Except Share Data)
 
                                                      Three Months
                                                         Ended
                                                        March 31,
                                                      2001    2000
 
     Operating Revenues:
       Passenger                                   $ 3,598  $ 3,666
       Cargo                                           140      141
       Other, net                                      104      104
         Total operating revenues                    3,842    3,911
 
     Operating Expenses:
       Salaries and related costs                    1,614    1,428
       Aircraft fuel                                   514      434
       Depreciation and amortization                   324      297
       Other selling expenses                          180      160
       Passenger commissions                           141      169
       Contracted services                             258      228
       Landing fees and other rent                     202      188
       Aircraft rent                                   188      185
       Aircraft maintenance mat'ls and outside repairs 187      171
       Passenger service                               115      101
       Other                                           234      206
         Total operating expenses                    3,957    3,567
 
     Operating Income (Loss)                          (115)     344
 
     Other Income (Expense):
       Interest expense                               (120)    (106)
       Interest capitalized                              9       12
       Interest income                                  25       25
       Miscellaneous income (expense), net              (4)      17
       Gains from the sale of investments              ---       73
       Fair value adjustments of SFAS 133 derivatives  (17)     ---
                                                      (107)      21
 
     Income (Loss) Before Income Taxes                (222)     365
 
     Income Taxes Provided                              89     (149)
 
     Net Income (Loss)                                (133)     216
 
     Preferred Stock Dividends                          (3)      (3)
 
     Net Income (Loss) Available
       To Common Shareowners                        $ (136)   $ 213
 
     Diluted Income (Loss) Per Common Share:        $(1.11)   $1.61
 
     Net Income (Loss) - Excluding Unusual Items*   $ (122)   $ 172
 
     Diluted Income (Loss) Per Common Share -
       Excluding Unusual Items*                     $(1.02)   $1.27
 
     Operating Margin                                -2.98%   8.78%
 
     Weighted Average Shares Used In Diluted
       Income Per Common Share Computation         123,031  133,587
 
 
     STATISTICAL SUMMARY
 
     Revenue Psgr Miles (millions)                  25,285   25,559
     Available Seat Miles (millions)                37,727   37,224
     Passenger Mile Yield (cents)                    14.23    14.34
     Operating Revenue Per Available
       Seat Mile (cents)                             10.18    10.51
     Operating Cost Per Available Seat Mile (cents)  10.49     9.58
     Passenger Load Factor (percent)                 67.02    68.66
     Passengers Enplaned (millions)                 26,932   28,158
     Breakeven Passenger Load Factor (percent)       69.16    62.23
     Revenue Ton Miles (millions)                    2,977    2,888
     Cargo Ton Miles (millions)                        437      439
     Cargo Ton Mile Yield (cents)                    31.93    32.08
     Fuel Gallons Consumed (millions)                  696      703
     Average Price Per Fuel Gallon (cents)           73.81    61.71
     Number of Aircraft in Fleet at End of Period      829      792
     Average Full-Time Equivalent Employees         80,600   80,100
 
 
     Unusual items consist of the following: 1) gains on sales of
     investments, and 2) fair value adjustments of SFAS 133
     derivatives.
 
 

SOURCE Delta Air Lines, Inc.
    ATLANTA, April 18 /PRNewswire/ -- Delta Air Lines (NYSE:   DAL) today
 reported a net loss of $122 million and a diluted loss per share of $1.02 for
 the March 2001 quarter versus net income of $172 million and diluted earnings
 per share of $1.27 in the March 2000 quarter, excluding unusual items.
 Including unusual items, the March 2001 quarter net loss and diluted loss per
 share were $133 million and $1.11, respectively, versus net income of
 $216 million and diluted earnings per share of $1.61 in the March 2000
 quarter.
     "We faced several challenges in the first quarter of 2001," said Leo F.
 Mullin, Delta's chairman and chief executive officer.  "The slowing economy
 and pilot labor issues at Comair and Delta resulted in a loss for the first
 time in the last 24 quarters.  Because Delta's highest commitment, after
 safety, is to provide dependable air travel to our customers, we regret any
 inconvenience these issues may have caused our passengers.  I would like to
 express my sincere gratitude to employees at Delta, Comair, and Atlantic
 Southeast Airlines (ASA) who have worked so diligently to deliver the best
 possible customer service despite these difficulties," said Mullin.
     In a Form 8-K filed on March 13, 2001, Delta estimated lower operating
 revenue for the March 2001 quarter of approximately $100 million due to a
 reduced flight schedule and between $200 and $250 million as a result of
 weaker business traffic primarily associated with the slowing economy, from
 its expectation at the start of the year.  Delta estimated a net loss of $85
 to $110 million in the March 2001 quarter and estimated a diluted loss per
 share to be in the range of $0.70 to $0.90.  The diluted loss per share of
 $1.02, excluding unusual items, was higher than anticipated due to the Comair
 pilot strike, which began on March 26, 2001.  The strike reduced revenue and
 earnings per share by an estimated $24 million, pretax, and $0.12,
 respectively.
     In the March 2001 quarter, Delta's unit cost increased 9.4 percent over
 the March 2000 quarter, while non-fuel unit cost increased 8.4 percent,
 primarily due to the lower than originally planned increase in available
 capacity.  In order to increase its schedule reliability, Delta reduced
 planned capacity by 2.7 percent in the quarter, while retaining a portion of
 the expenses incurred prior to this decision.  Total operating expenses
 increased 10.9 percent while available capacity increased only 1.4 percent.
 Delta's fuel hedging program continued to help reduce the impact of high fuel
 prices, saving Delta approximately $106 million, pretax, in the quarter.
     As a result of the continued economic softness and public concern over a
 possible strike by Delta pilots, Delta anticipates that June 2001 quarter
 operating revenues will be negatively impacted by $300 to $350 million,
 excluding the impact of the Comair strike.
 
     Unusual Items
     In the March 2001 quarter, Delta recognized a $17 million non-cash, pretax
 charge to account for certain equity rights, primarily priceline.com, and fuel
 derivative instruments to comply with Statement of Financial Accounting
 Standard 133.  In the March 2000 quarter, Delta recorded a $73 million pretax
 cash gain from the sale of priceline.com stock.
 
     Labor Update
     Today, Delta will be meeting in Washington, D.C. with the Air Line Pilots
 Association (ALPA) and the National Mediation Board (NMB).  The meeting comes
 with 10 days left in the cooling-off period, set to expire at 12:01 a.m.
 Eastern Daylight Time on April 29, 2001.
     "Our ability to conclude these negotiations before the end of the cooling-
 off period on April 29 is dependent upon both parties' willingness to
 negotiate toward a settlement," said Mullin.  "We believe that we will reach
 an agreement which will provide industry-leading pay rates and other contract
 improvements to our pilots while protecting Delta's financial viability and
 competitiveness.  This may, however, require utilizing some portion of the
 extra 60 days provided by the Presidential Emergency Board process."
     Delta's current comprehensive proposal -- which would add approximately
 $2.0 billion in costs over the next four years -- would make our pilots the
 highest paid in the industry on the equipment they fly.  The estimated
 financial gap between Delta's offer and ALPA's proposal is approximately $1.7
 billion.
     President Bush has said that he would take the necessary steps to prevent
 strikes at major airlines this year because of the severe disruption to the
 traveling public and to the economy that a strike would cause.
     Separately, operations at Delta's wholly owned subsidiary Comair remain
 suspended due to a strike by Comair pilots, who are also represented by ALPA.
 Comair is committed to reaching an industry-leading agreement as quickly as
 possible and is ready and willing to resume negotiations on a contract that
 balances the needs of customers, employees, and shareowners.
 
     Online Leadership
     Online sales at Delta's Web site, delta.com, continue to grow. For the
 March 2001 quarter, revenue from these ticket sales totaled $265 million,
 which is a 25 percent increase over the December 2000 quarter and 70 percent
 higher than the same period last year. Revenue on delta.com represents 7
 percent of Delta's passenger revenue.  Delta's Web site was recently
 recognized by Business 2.0 magazine as the most user-friendly B2C site on the
 Web.  Revenue from all online channels now represents 12 percent of Delta's
 passenger revenue.
 
     Network Highlights
     On March 21, Delta, Air France, Aeromexico, and Korean Airlines welcomed
 CSA Czech Airlines as the newest member of the  SkyTeam alliance.  CSA brings
 an additional European partner to SkyTeam with its international hub in
 Prague, complementing Air France's operations in Paris.  SkyTeam's Prague hub
 will provide an increase in travel destinations for passengers traveling
 through Central and Eastern Europe and the Middle and Far East.
     During the quarter, Delta also announced new service beginning this summer
 from New York's John F. Kennedy (JFK) International Airport to Cairo, Dubai,
 and Tel Aviv and the first ever international service using a Delta aircraft
 from Boston's Logan International Airport to London's Gatwick Airport.  In
 addition, Delta began its first nonstop service from JFK to Tokyo on April 1,
 2001.
     Delta Express, Delta's low-fare operation, announced new service from
 Chicago's O'Hare International Airport to Orlando and Ft. Lauderdale;
 Hartford/Springfield to Tampa; Providence to Ft. Lauderdale; and Indianapolis
 to Ft. Lauderdale and Ft. Myers.  To provide easier access to Delta's low-fare
 flights to Florida, Delta Express launched a new web address -- flydlx.com.
 
     Number 1 in Customer Service
     Delta has been ranked Number 1 in customer service in a joint study by the
 Aviation Institute at the University of Nebraska at Omaha and the National
 Institute for Aviation Research at Wichita State University.  The study is
 based largely on U.S. Department of Transportation operating and customer
 service statistics.  "Even against a backdrop of operational challenges, we
 have demonstrated our ability to serve our customers well and better than any
 of our competitors -- both in the air and on the ground," said Vicki Escarra,
 executive vice president -- customer service.
     Delta will host a webcast to discuss its quarterly earnings today, April
 18, at 10:00 a.m. Eastern Daylight Time.  The webcast is available via the
 Internet at www.delta.com/inside/investors/index.jsp .
     Delta's goal is to become the No. 1 airline in the eyes of its customers,
 flying passengers and cargo from anywhere to everywhere.  People choose to fly
 Delta more often than any other airline in the world on 5,183 flights each day
 to 354 cities in 65 countries on Delta, Delta Express, Delta Shuttle, Delta
 Connection carriers, and Delta's Worldwide Partners.  Delta is a founding
 member of SkyTeam, a global airline alliance which provides customers with
 extensive worldwide destinations, flights and services.  For more information,
 visit Delta at delta.com .
     Statements in this Press Release, which are not purely historical facts,
 including statements about our expectations, beliefs, intentions, or
 strategies for the future, may be "forward-looking statements" as defined in
 the Private Securities Litigation Reform Act of 1995.  Forward-looking
 statements involve risks and uncertainties that could cause actual results to
 differ materially from historical experience or our present expectations.
 Factors that could cause these differences include, but are not limited to,
 general economic conditions; competitive factors in our industry; including
 mergers and acquisitions; outcomes of negotiations on collective bargaining
 agreements; changes in aircraft fuel prices; disruptions to operations due to
 adverse weather conditions, air traffic control-related constraints and labor
 matters such as the duration of the Comair pilot strike and a possible strike
 by Delta pilots; fluctuations in foreign currency exchange rates; governmental
 actions; the willingness of customers to travel generally and with us
 specifically; and the outcome of our litigation.  Caution should be taken not
 to place undue reliance on our forward-looking statements, which are current
 only as of the date of this Press Release.  More detailed information about
 risks and uncertainties as of other dates can be read in Delta's past and
 future Forms 10-K and 10-Q and certain Forms 8-K filed with the Securities and
 Exchange Commission.
 
 
                               DELTA AIR LINES, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                   (Unaudited; In Millions, Except Share Data)
 
                                                      Three Months
                                                         Ended
                                                        March 31,
                                                      2001    2000
 
     Operating Revenues:
       Passenger                                   $ 3,598  $ 3,666
       Cargo                                           140      141
       Other, net                                      104      104
         Total operating revenues                    3,842    3,911
 
     Operating Expenses:
       Salaries and related costs                    1,614    1,428
       Aircraft fuel                                   514      434
       Depreciation and amortization                   324      297
       Other selling expenses                          180      160
       Passenger commissions                           141      169
       Contracted services                             258      228
       Landing fees and other rent                     202      188
       Aircraft rent                                   188      185
       Aircraft maintenance mat'ls and outside repairs 187      171
       Passenger service                               115      101
       Other                                           234      206
         Total operating expenses                    3,957    3,567
 
     Operating Income (Loss)                          (115)     344
 
     Other Income (Expense):
       Interest expense                               (120)    (106)
       Interest capitalized                              9       12
       Interest income                                  25       25
       Miscellaneous income (expense), net              (4)      17
       Gains from the sale of investments              ---       73
       Fair value adjustments of SFAS 133 derivatives  (17)     ---
                                                      (107)      21
 
     Income (Loss) Before Income Taxes                (222)     365
 
     Income Taxes Provided                              89     (149)
 
     Net Income (Loss)                                (133)     216
 
     Preferred Stock Dividends                          (3)      (3)
 
     Net Income (Loss) Available
       To Common Shareowners                        $ (136)   $ 213
 
     Diluted Income (Loss) Per Common Share:        $(1.11)   $1.61
 
     Net Income (Loss) - Excluding Unusual Items*   $ (122)   $ 172
 
     Diluted Income (Loss) Per Common Share -
       Excluding Unusual Items*                     $(1.02)   $1.27
 
     Operating Margin                                -2.98%   8.78%
 
     Weighted Average Shares Used In Diluted
       Income Per Common Share Computation         123,031  133,587
 
 
     STATISTICAL SUMMARY
 
     Revenue Psgr Miles (millions)                  25,285   25,559
     Available Seat Miles (millions)                37,727   37,224
     Passenger Mile Yield (cents)                    14.23    14.34
     Operating Revenue Per Available
       Seat Mile (cents)                             10.18    10.51
     Operating Cost Per Available Seat Mile (cents)  10.49     9.58
     Passenger Load Factor (percent)                 67.02    68.66
     Passengers Enplaned (millions)                 26,932   28,158
     Breakeven Passenger Load Factor (percent)       69.16    62.23
     Revenue Ton Miles (millions)                    2,977    2,888
     Cargo Ton Miles (millions)                        437      439
     Cargo Ton Mile Yield (cents)                    31.93    32.08
     Fuel Gallons Consumed (millions)                  696      703
     Average Price Per Fuel Gallon (cents)           73.81    61.71
     Number of Aircraft in Fleet at End of Period      829      792
     Average Full-Time Equivalent Employees         80,600   80,100
 
 
     Unusual items consist of the following: 1) gains on sales of
     investments, and 2) fair value adjustments of SFAS 133
     derivatives.
 
 SOURCE  Delta Air Lines, Inc.