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Biggest US airlines have combined 1Q loss over $1B

April 27, 2011 | William Zimmerman

Airlines @1B loss 1Q 2011.jpegby Joshua Freed and David Koenig, via Yahoo! News

With fresh red ink at Delta and US Airways, the five biggest U.S. airlines showed a combined loss of more than $1 billion for the first quarter. Soaring jet fuel prices are the big culprit.

The total loss was only about $100 million larger than a year ago, even though jet fuel spending jumped by 28 percent, nearly $1.9 billion. Airlines were able to narrow the difference in fuel spending with a 12 percent increase in revenue.

They have raised fares seven times since the start of the year and would like to keep doing that to offset higher fuel costs.

"We must fully recapture our costs on every flight, every day, to maintain and improve our earnings performance," said Delta CEO Richard Anderson.

Delta Air Lines Inc., which reported a $318 million loss on Tuesday, said fare increases covered 70 percent of the run-up in fuel costs for the first quarter. That's not enough.

US Airways Group Inc. lost $114 million in the quarter. On Tuesday, it announced new reductions to its flying schedule in the second half of the year, which should cut costs and perhaps drive up fares.

The Delta and US Airways number came after United Continental Holdings Inc. and American Airlines parent AMR Corp. reported huge losses last week. Southwest Airlines Co. was alone among the five biggest U.S. airline operators in posting a profit, and just $5 million at that.

Between them, the five airlines lost $1.08 billion in the first three months of this year, when several big storms in the U.S. and the earthquake in Japan compounded the problem of costly jet fuel. A year ago, the same airlines lost $978 million. Fuel spending jumped to $8.45 billion from $6.60 billion a year earlier.








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