Three of the nation's largest airlines reported a combined $911 million in third-quarter losses Wednesday. The largest by far was at Delta Air Lines Inc., which said bankruptcy loomed unless it could quickly win concessions from pilots and debt holders.
Soaring fuel prices were the main culprit for the red ink at AMR Corp., parent of American Airlines, Northwest Airlines Corp. and Delta, whose situation has been exacerbated by the cost of servicing its $20.6 billion in debt. All three reported higher revenue.
Delta said its unrestricted cash reserves fell to $1.45 billion as of Sept. 30 from $2 billion on June 30. The nation's third-largest carrier said it desperately needed $1 billion in cuts from its pilots and new debt terms from some of its creditors.
The pilots union said in a memo late Wednesday that its talks with management would continue through the weekend. The memo said that "because of the time constraints presented by Delta's worsening financial condition," the union's executive committee would reconvene on Monday for an update.
For the three months ended Sept. 30, Atlanta-based Delta said it lost $651 million, or $5.16 a share, wider than the year-earlier loss of $168 million, or $1.36. Delta said it was affected by the four large hurricanes that hit Florida, a major destination for Delta travelers. Even so, its revenue rose 5.9% to $3.87 billion.
The quarterly loss at AMR of Fort Worth, Texas, whose American unit is the nation's largest carrier, was $214 million, or $1.33 a share. A year earlier, it posted a $1-million profit. Revenue rose 3.3% to $4.76 billion, but that was below the $4.81 billion forecast by analysts.
Chief Executive Gerard Arpey said that American would take steps to raise revenue and reduce costs, including job cuts and a 5% cut in the airline's capacity by the first quarter of next year.
Arpey offered no details on layoffs.
Eagan, Minn.-based Northwest, the No. 4 U.S. carrier in terms of revenue, said it lost $46 million, or 54 cents a share, in the third quarter. That contrasted with a profit of $42 million, or 49 cents, a year earlier. Revenue rose more than 13% to $3.05 billion.
AMR's shares fell 20 cents to $6.49. Northwest shares fell 20 cents to $7.72. And shares of Delta fell 6 cents to $2.93, a new 52-week low. AMR and Delta trade on the New York Stock Exchange. Northwest trades on Nasdaq.
Analysts believe Delta has only a few weeks left to win concessions from pilots and restructure its heavy debt to avoid a Chapter 11 filing. Chief Executive Gerald Grinstein said that "time is of the essence."
Delta did not hold a conference call to answer investor questions, suggesting to some analysts that a bankruptcy filing is near.
The pilots union said there were still significant issues to resolve.