Delta Air Expects A Profit For '09; Keeps Order For 18 787s
March 10 2009 - 2:23PM
Dow Jones News
Delta Air Lines Inc. (DAL) said Tuesday it expects to report a
full-year profit despite forecasting a 14% drop in operating
revenue for the first quarter.
Ed Bastian, Delta's president, said the airline expects to break
even on a pretax level for the first quarter and move into profit
in the second quarter. He said the company could still remain in
the black even if operating revenue were to fall by as much as
18%.
Delta also affirmed that it will keep its order for 18 Boeing
787s, an order originally placed by merger partner Northwest
Airlines.
Delta is the North American launch customer for the type, but
had omitted the order from its annual report published last week,
fueling speculation it may be canceled or deferred.
The world's largest airline by revenue is cutting capacity and
benefiting from lower fuel costs as it deals, alongside its rivals,
with sharp falls in traffic.
Bastian told a JPMorgan Chase conference that the revenue
picture shouldn't deteriorate from the first quarter, traditionally
the weakest for airlines in the northern hemisphere.
Delta expects the negative impact of fuel hedges to unwind by
the end of the second quarter, eliminating the losses that blighted
earnings at many carriers over the past two quarters.
The airline said that, beginning in September, it would cut
international routes by 10%. That's in addition to domestic
capacity cuts announced December.
Bastian said Delta should get more than $1 billion of financial
benefits in 2010 from last year's merger with Northwest. Early in
2010 Delta will switch to a new reservations system, combining the
two carriers' operations.
Delta also said it has financing in place for all of the
aircraft it has on order. Shares were up 8.7% at $4.55 in recent
trading Tuesday.
-By Ann Keeton, Dow Jones Newswires; 312-750-4120,
Ann.keeton@dowjones.com.