Wednesday, April 27, 2011

Delta (DEL) (LCC) (UAL) (AMR) Lose Over $1 Billion in First Quarter

Delta Air Lines Inc. (NYSE:DEL), US Airways (NYSE:LCC), United Continental Holdings Inc. (NYSE:UAL) and AMR Corp. (NYSE:AMR) lose over $1 billion combined in first quarter. Southwest Airlines (NYSE:LUV) was able to generate a small $5 million profit.

Oddly enough, shares of the companies jumped after earnings reports Tuesday, as results were expected to be even worse than that. Delta ended up losing $318 million, according to its Tuesday report. US Airways Group lost $114 in the quarter.

The vast majority of the blame for the dismal performance of the industry is the surge in the costs of jet fuel in the quarter. Even after numerous fare increases, Delta said it only covered about 70 percent increase in fuel prices.

Overall, losses in the quarter for the four companies came in a $100 million more than last year. Fuel spending soared to almost $1.9 billion, an increase of 28 percent.

The major way to deal with the challenges by the airlines is to cut back on flights and park some planes, which they are all doing.

AMR closed Tuesday at $5.74, gaining $0.17, or 3.05 percent. United Continental ended the day at $22.58, up $0.55, or 2.50 percent. US Airways closed the session at $8.80, rising $0.52, or 6.28 percent. Delta closed at $9.99, soaring $0.99, or 11 percent.

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