Delta reports a third quarter net loss of $164 million

Delta Air Lines reported a net loss of $164 million and a loss per share of $1.36 for the September 2003 quarter. In the September 2002 quarter, Delta reported a net loss of $326 million and a loss per share of $2.67.

Excluding the unusual items described below, the September 2003 quarter net loss and loss per share were $172 million and $1.43, respectively, compared to a net loss of $212 million and loss per share of $1.75 in the September 2002 quarter.

The First Call consensus estimate for the September 2003 quarter was a loss per share of $1.46, excluding unusual items. Positive cash flow from operating activities was $201 million for the September 2003 quarter.

Note 1 to the attached Consolidated Statements of Operations shows a reconciliation of Delta’s net loss reported under Generally Accepted Accounting Principles in the United States (GAAP) to the net loss excluding unusual items, as well as reconciliations of other financial measures including and excluding unusual items.

“Over the past two years, our industry has undergone dramatic, permanent changes. Today’s results, while somewhat better than we expected, show that Delta’s challenges are not yet over,” said Leo F. Mullin, Delta’s chairman and chief executive officer.

“To meet these challenges, Delta people have in place programs across the company intended to rebalance our revenue to cost relationship. At the same time, we are making prudent and strategic investments in technology, regional jet aircraft, our new low-fare operation, as well as in other areas. Taken together, these steps will strengthen the company over the long term by enhancing our cost competitiveness and positioning us for sustained success.”

Third quarter operating revenues increased 0.7 percent and passenger unit revenues increased 8.0 percent, compared to the September 2002 quarter. Delta has continued to outperform the industry in year-over-year unit revenue comparisons for each of the last 16 months through August 2003.

Operating expenses for the September 2003 quarter decreased 7.4 percent and unit costs decreased 1.2 percent as a result of charges taken during the September 2002 quarter. Excluding unusual items, unit costs increased 4.1 percent and fuel price neutralized1 unit costs increased 2.8 percent. The increase in fuel price neutralized unit costs was entirely driven by capacity reductions related to the Iraqi War.