Airline to resort to baggage charges
Delta Air Lines has reported a first quarter net loss of $749m year-on-year, excluding special items.
The airline said its figures had been hit by fuel hedging decisions made last year, when the price of crude was at $150 a barrel.
77% of Delta's fuel is hedged at last year's oil prices for the quarter, well above the current cost per barrel. But hedging will be reduced to 36% in the fourth quarter.
Delta's ceo Richard Anderson said services would continue to be unbundled to increase revenues, including a new $50 charge for second bags checked in for international customers.
"We continue to believe that unbundling our services is the right thing to do for our customers," he said.
The new charge, beginning July 1, is expected to give Delta's annual balance sheet a $100m boost.
Mr Anderson confirmed that capacity would continue to be cut in efforts to save on costs.
Staff numbers would also be reduced in line with capacity cuts, Mr Anderson said, in addition to a 6% decline in staff numbers already seen this quarter.
Staff numbers have declined through "voluntary programmes" such as early-out and early retirement packages, with more expected to leave in the autumn.
Further savings will be made through fleet size reductions, with 40-50 aircraft due to be grounded this year including its 14-strong fleet of B747-200s, and through the sale of assets.
Delta's president Ed Bastian said revenues were expected to be "under significant pressure for the remainder of the year."
But he said merger cost savings, lower fuel prices and new cash sources would help Delta through the recession.
"The fundamentals of our business remain strong, and once the economic outlook improves, Delta will be best positioned to take advantage of the global recovery," Mr Bastion said.
Traffic, including regional operations since merging with Northwest Airlines, fell 9.6% to 42.96 billion. Load factor fell to 77.1% from 79.7% last year.
Delta is the second airline this week to post significant first quarter losses, after United Airlines reported a $382m net loss.
United also blamed poor fuel hedging for much of the loss.
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