ATLANTA (AP) — Delta Air Lines Inc. will cut system capacity 3 percent next year and plans to shed more jobs, as it reported a quarterly loss Thursday bigger than a year ago. Executives were hesitant to say when the world's largest airline will grow again amid an economic recovery that is only starting to take shape.
Volume and revenue from corporate customers remain down by double digit percentages, but the margins at Delta have been improving in recent months.
Leisure travelers are starting to take to the air again, but they are paying smaller average fares, hitting the airline's bottom line.
"They continue to be under pressure — budgetary pressure and pressure on the economic front," Delta President Ed Bastian said of customers during a conference call with analysts and reporters.
Delta, based in Atlanta, has been cutting costs by parking planes, eliminating jobs and other initiatives. Additional job cuts are coming, Bastian said, referring to administrative reductions announced in August. He didn't offer specific numbers.
Delta's net loss for the three months ended Sept. 30 was $161 million, or 19 cents a share, compared to a loss of $50 million, or 13 cents a share, a year ago.
Excluding certain items, it recorded an adjusted profit of $51 million, or 6 cents a share in the latest quarter.
Revenue rose 32 percent to $7.6 billion from $5.7 billion a year ago before Delta's acquisition of Northwest Airlines was complete. But, if Northwest was included in last year's figure, revenue on a combined basis fell 21 percent year-over-year.
Analysts expected an adjusted loss of 5 cents a share on revenue of $7.6 billion.
The third quarter included the traditionally busy summer season, but major airlines were hit hard this year by weak demand for air travel, especially for business and international travel.
Capacity has been shed, jobs have been cut and other operational changes have been made, including efforts to preserve cash.
In August, Delta said it planned to cut more management and administrative jobs but didn't say how many. CEO Richard Anderson told employees that Delta has seen its revenue stream decline by billions of dollars because of the weak economy and the drop-off in demand for air travel.
Delta has also said it plans to cut international capacity by 15 percent starting in September. It will also adjust the international routes it serves, the number of flights offered and the size of planes it uses next summer as it seeks to return to profitability.
Delta ended the quarter with $5.8 billion in unrestricted liquidity, including $5.5 billion in cash, cash equivalents and short-term investments and $300 million available in a revolving credit line.
Delta remains on track with its integration of Northwest under its wing and expects to receive a single operating certificate from the FAA by the end of the year.
Its hubs include airports serving Atlanta, Salt Lake City and Tokyo. Along with its Northwest subsidiary and Delta Connection carriers it offers service to 355 destinations in 64 countries.
Delta shares fell 18 cents, or 2.2 percent, to $8.15 in late morning trading.
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