Delta Air Lines Inc reported a larger than expected loss for the first quarter on Wednesday, as its market value fell by $6.1billion due to soaring jet fuel costs triggered by record crude oil prices.
Delta Air Lines Inc. reported a net adjusted loss of $274 million, or 69 cents per share, compared to a 2 cent loss a year ago. Analysts had expected a 51 cent loss.
Revenue rose 12 percent to $4.77 billion from $4.2 billion.
The airline's unadjusted loss was $6.4 billion due in large part to $6.1 billion in depreciations linked to fuel price increases.
The airline, which has been under pressure to reduce costs, announced an agreement last week to merge with Northwest Airlines. Delta says the combination, which must still be approved by regulators, will generate $1 billion in annual revenue and cost savings.
Our need to respond to the pressures of dramatically rising fuel costs and a softening U.S. economy drove us to take a closer look at all options to protect Delta's future, Chief Executive Richard Anderson said in reference to the merger.
During the quarter, Delta said it had changed its business plan for the year to adjust for higher crude oil prices. The airline will remove up to 90 planes from its operations by the end of the year.
The company said there was a $585 million increase in costs due to higher fuel prices for the first quarter. Sales from passengers grew 10 percent.
The airline said it had $3.6 billion of unrestricted liquidity as of March 31. It said $2.8 billion in cash and liquid assets, with $2.6 billion of that being unrestricted. An additional $1 billion was available under credit.