Delta, Northwest report combined $10.5B loss on fuel costs

ATLANTA – Delta Air Lines Inc., the nation’s third-largest carrier, said Wednesday its loss widened in the first quarter to a whopping $6.39 billion because of soaring fuel prices and the steep decline in the company’s market value.

… In a memo to employees Wednesday, Ed Bastian, Delta’s president and chief financial officer, said the airline expects some of its peers in the industry to record similar adjustments. A spokeswoman said Delta would have recorded the charge regardless of the tie-up with Northwest.

… The company said its first-quarter loss before special items was driven by a $585 million year-over-year increase in the cost of fuel.

… “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 a statement. “The merger with Northwest will create an airline with the size, scale and global presence to weather economic downturns and compete long-term in the global marketplace.”

The airlines are trying to sell the deal to the public, employees, federal regulators and Wall Street. So far, investors appear unconvinced.

AP