Delta Suffers Worst Q3 Loss in 73-Years

October 15, 2002
by Mark Odell

Delta Air Lines is to defer deliveries of new aircraft for the next two years after it reported its worst third-quarter loss in its 73-year history.

The decision to postpone delivery of 29 Boeing jets scheduled for 2003 and 2004 is aimed at cutting capital expenditure by $1.3bn.

The fleet reorganisation will come as a heavy blow to Boeing, Delta's sole supplier of jets of more than 100 seats, which reports its third-quarter results on Tuesday.

The aircraft maker has warned it would take a $250m charge in the quarter to reflect the impact the industry downturn has had on aircraft values. Delta said it was grounding its fleet of 15 long-haul Boeing MD-11s from early next year to reduce operating costs.

The radical action was taken as the carrier reported a net loss of $326m for the three months to the end of September, against last time's $259m loss.

The heavy losses at Delta, widely regarded as one of the better positioned US airlines, reflects the extent of the crisis facing the US airline industry.

Most of its rivals are also expected to report heavy losses in what is usually the strongest quarter for northern hemisphere carriers.

Delta has warned it will have to cut a further 1,500 flight attendant jobs from a workforce of 68,000.

The airline has cut 10,000 jobs since September 11 last year.

Leo Mullin, chief executive, warned of more "difficult but necessary decisions" and said there was no sign of improvement in trading conditions.

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