Airline losses spreading

Nancy Marshall-Genzer Apr 23, 2008

TEXT OF STORY

Lisa Napoli: A 12 percent increase in sales didn’t help. Delta Airlines this morning reported losses of $6.4 billion for the quarter. They say the rising cost of oil is to blame. Would-be partner Northwest also reported a weak quarter, as both airlines saw their market values dip. All this after United reported a lowsy quarter on Tuesday — a half a billion dollars in losses. Here’s Nancy Marshall Genzer with details.


Nancy Marshall Genzer: Delta and Northwest both reported losing more than $15 a share. Excluding over $6 billion in decreased market value, Delta says it lost $274 million in the first quarter. But, it could have been worse.

Richard Aboulafia: It’s nothing like the giant, cash-burning enterprise that United became yesterday.

Aviation analyst Richard Aboulafia says United just isn’t managed as well as Delta. United lost more than $500 million in the first quarter.

Aboulafia: United is managing as if they’re going to be merged into somebody else, waiting for someone else to provide an answer.

Aboulafia says Delta is better at cost cutting, and establishing lucrative international routes. But the airlines can’t manage their way out of their biggest problem — high fuel prices. Plus, the weakening dollar is cutting into international travel, and regulators are cracking down on safety. Add all that up, and it’s no surprise that four carriers have sought bankrupty protection in just the past few weeks.

In Washington, I’m Nancy Marshall Genzer for Marketplace.

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