Delta Stays in the Red in 2nd Quarter

Delta Air Lines Inc.’s ability to stay out of bankruptcy grew more uncertain Thursday as the nation’s third-largest airline posted a $388-million second-quarter loss to push its total losses to just under $10 billion since early 2001.

“There are some things beyond our control,” Chief Executive Gerald Grinstein said, citing fuel and pension costs.

He said Delta would review those items in determining its course.

Fitch Ratings airline analyst Bill Warlick said Atlanta-based Delta would be forced into Chapter 11 if Congress didn’t make meaningful changes in pension laws by the fall.

“There are variables that could change between now and the fall, but clearly they’re running out of time,” Warlick said.

Discount airline JetBlue Airways Corp. and the parent companies of regional carriers America West, Alaska Airlines and Horizon Air all reported small profits Thursday, a positive sign in an industry plagued by persistently high fuel prices.

Delta said it spent $1.05 billion on fuel in the quarter, 57.5% more than it spent in the same period a year before.

The company’s results beat Wall Street expectations, but its shares fell 36 cents to $3.55.

Unrestricted cash reserves fell to $1.7 billion at the end of the second quarter, compared with the $1.8 billion it had at the end of the first quarter.

Delta’s loss for the three months ended June 30 was equivalent to $2.64 a share, compared with a loss of $1.97 billion, or $15.70 a share, a year earlier. The latest loss includes $6 million in dividends paid out to preferred shareholders.

Excluding one-time items, Delta said it lost $304 million, or $2.11 a share. On that basis, analysts surveyed by Thomson First Call had expected a loss of $2.37 a share.

Revenue in the April-to-June quarter rose 5.7% to $4.19 billion, compared with $3.96 billion a year earlier.

Forest Hills, N.Y.-based JetBlue reported a second-quarter profit of $12.2 million, or 11 cents a share. That’s 43% lower than a year earlier but matched Wall Street expectations. Seattle-based Alaska Air Group Inc., the parent of Alaska Airlines and Horizon Air, swung to a quarterly profit of $17.4 million, or 56 cents a share.

Tempe, Ariz.-based America West Holdings Corp. reported a wider profit of $13.9 million, or 29 cents a share, for the second quarter.

JetBlue shares fell $1.73 to $21.07. America West shares rose 19 cents to $8.38. Alaska Air shares fell 77 cents to $33.45.