itravelnet.com - Travel Directory

Airline News

Airline News

AIRLINE NEWS


Thursday, July 24, 2008
 

Northwest Air Net Loss Beats Estimates


Northwest Airlines Corp., the U.S. carrier being acquired by Delta Air Lines Inc., posted a second- quarter net loss of $377 million as it wrote down the value of its assets and spent more on fuel.

The deficit was narrower than analysts estimated when some costs are excluded, and the shares rose in early trading. With the costs, the net loss was $1.43 a share, compared with a year earlier profit of $2.15 billion because of a one-time gain tied to exiting bankruptcy, the Eagan, Minnesota-based airline said.

U.S. airlines are parking more than 465 planes and cutting 26,000 jobs to cope with a 77 percent fuel price surge over the past year. Delta, which agreed in April to buy Northwest to form the world's largest carrier, last week doubled its target for new revenue and savings from the merger to $2 billion.

"Given the current fuel environment, the merger makes even more sense," Chief Executive Officer Doug Steenland said today in a statement. New revenue and savings "will better allow the combined carrier to manage through these challenges."

Northwest, the sixth-largest U.S. carrier, recorded a writedown of goodwill of $547 million in the quarter to reduce the value of its assets, and had a gain of $250 million on its fuel hedges.

Excluding those costs and benefits, the loss was $80 million, or 30 cents a share, based on Bloomberg data. On that basis, analysts expected a loss of 50 cents a share, the average of 9 estimates compiled by Bloomberg.

Northwest rose 44 cents, or 4.8 percent, to $9.52 at 9:21 a.m. before regular New York Stock Exchange trading.

Revenue rose 12 percent to $3.58 billion, exceeding the $3.46 billion average estimate of 6 analysts surveyed.

Northwest ended the second-quarter with $3.3 billion in free cash and $424 million in restricted cash, little changed from the first quarter. On July 15, Northwest added $180 million more from financing some aircraft and engines.

The average cost of Northwest's jet fuel jumped 69 percent from a year earlier. Jet fuel has surpassed labor as the industry's largest expense.

Source: bloomberg.com

Labels: ,


Home |  About |  Contact |  Disclaimer |  Privacy Policy |  Sitemap |  Travel Merchants |  Add a travel site |  Advertise Copyright itravelnet.com itravelnet.com - Travel Directory | All Rights Reserved