EXHIBIT 99.1
FOR IMMEDIATE DISTRIBUTION
CONTACT: Corporate Communications Investor Relations
404/715-2554 404/715-6679
DELTA AIR LINES REPORTS FIRST QUARTER RESULTS
ATLANTA, April 16, 2002 - Delta Air Lines (NYSE:DAL) today reported results for
the March 2002 quarter. The key points are:
- - DELTA REPORTS FIRST QUARTER LOSS OF $354 MILLION, OR $2.90 LOSS PER
SHARE, EXCLUDING UNUSUAL ITEMS.
- - DELTA REPORTS FIRST QUARTER LOSS OF $397 MILLION, OR $3.25 LOSS PER
SHARE, INCLUDING UNUSUAL ITEMS.
- - DELTA RECORDED AN OPERATING PROFIT IN MARCH 2002, EXCLUDING UNUSUAL
ITEMS.
- - DELTA CONTINUES TO FOCUS ON COST CONTAINMENT THROUGH INNOVATION AND
DISCIPLINE.
Delta Air Lines (NYSE:DAL) today reported a net loss of $354 million and a loss
per share of $2.90 for the March 2002 quarter versus a net loss of $122 million
and loss per share of $1.02 in the March 2001 quarter, excluding unusual items.
Including unusual items, the March 2002 quarter net loss and loss per share were
$397 million and $3.25, respectively, versus a net loss of $133 million and loss
per share of $1.11 in the March 2001 quarter. The results are in line with
previous announcements concerning first quarter expectations.
"We continue to notice signs of gradual recovery," said Leo F. Mullin,
Delta's chairman and chief executive officer. "We are focused on our recovery
efforts and creating a more promising year in 2002. In the first three months of
this year, we saw our customers and revenue returning, though revenues are
recovering at a slower pace. There is still a long road ahead of us, but Delta
has the financial and operational strength to emerge from these tough times as a
winner."
FINANCIAL AND OPERATIONAL PERFORMANCE
March 2002 quarter operating revenues declined 19.3 percent from the
March 2001 quarter. Excluding unusual items, operating expenses for the March
2002 quarter decreased 11.6 percent, unit costs decreased 1.2 percent and unit
costs on a fuel price neutralized basis(1) increased 1.7 percent. Load factor
for the quarter was 68.9 percent, on a 10.6 percent reduction in capacity,
compared to 67.0 percent for the same period a year ago. Delta ended the quarter
with a completion factor of 98.3 percent versus 96.1 percent during the same
period last year.
"Delta's recovery is on track and we are making progress," said M.
Michele Burns, executive vice president and chief financial officer. "In fact,
in the month of March, Delta had positive cash flow from
- ---------------------
(1) The amount of operating cost incurred per available seat mile during a
reported period, adjusting fuel price to equal the prior year.
operations and we recorded an operating profit. Our financial strategy remains
consistent and focused on capacity discipline, cost containment and cash
preservation."
In the March quarter, Delta filed its 2001 tax return eight months
early on February 6, 2002 and received a $160 million refund the following day.
Subsequently, Congress passed the economic stimulus package, extending the net
operating loss carry back period to five years. Delta again expedited the filing
of its refund claim and received an incremental tax refund of $300 million on
March 22, 2002. Delta ended the March 2002 quarter with total liquidity of $3.1
billion comprised of a $1.5 billion cash balance and an additional near term
liquidity position of $1.6 billion.
In a continuous effort to manage costs and preserve liquidity, Delta
announced on March 14, 2002 that "base" commissions will no longer be paid to
travel agents for tickets sold in the United States (including Puerto Rico and
the U.S. Virgin Islands) and Canada, effective immediately. While Delta is
eliminating published base commissions, individually negotiated incentive
commissions will continue to be paid to select agents. Delta expects the
restructuring to reduce passenger commission expenses by approximately $100 -
$150 million in 2002.
Delta's fuel hedging program saved $21 million, pretax for the quarter.
Moreover, Delta has hedged 57 percent of its expected jet fuel requirements in
the June 2002 quarter at an average price of $0.58 per gallon.
UNUSUAL ITEMS
In the March 2002 quarter, Delta recorded $43 million of unusual costs,
net of taxes. Of this amount, $25 million, net of tax, represents the temporary
carrying cost of grounded aircraft and surplus pilots, as well as
re-qualification training and relocation costs resulting from the capacity
reductions implemented in November 2001. As discussed in the December 2001
quarter, Delta expects to record a total of $82 million, net of tax, for these
costs during 2002. Also during the March 2002 quarter, Delta recorded an $18
million expense, net of tax, for non-cash, fair value adjustments of certain
equity rights in other companies, primarily priceline.com, and fuel derivative
instruments to comply with Statement of Financial Accounting Standard (SFAS)
133. In the March 2001 quarter, Delta recognized an $11 million, non-cash
expense, net of tax, related to SFAS 133.
NETWORK HIGHLIGHTS
Delta is encouraged by its transatlantic, leisure and regional jet
market performance. However, weakness in high-yield business travel will
continue to affect the pace of Delta's recovery.
As previously announced on January 18, 2002, Delta and its European
SkyTeam partners, Air France, Alitalia and CSA Czech Airlines received final
approval from the U.S. Department of Transportation for antitrust immunity. The
grant of antitrust immunity enables Delta and its European partners to offer a
more integrated route network, and develop common sales, marketing and discount
programs for customers.
In continued support of our SkyTeam Alliance, Delta inaugurated nonstop
service between Atlanta and Milan-Malpensa on April 1, 2002 and began a second
nonstop flight between New York John F. Kennedy International (JFK) and Paris on
March 15, 2002. Delta also announced plans to reinstate codesharing on Korean
Air flights, beginning May 1, 2002.
Delta Express, Delta's low-fare airline, announced expansion of flights
from New York to Florida this spring in response to improved leisure demand for
travel to Florida. Beginning June 1, 2002, two new
flights will be added from JFK to Ft. Lauderdale for a new total of six
round-trip flights daily. Delta Express also will add one new flight from JFK to
both Orlando and Tampa, for a new total of four round-trip flights daily to
Orlando and three round-trip flights daily to Tampa. Delta Express has now
returned to 64% of its pre-September 11 capacity.
Delta continued to leverage its industry-leading regional jet program
to provide superior network feed and flexibility. Delta's connection carriers
remain an essential piece of its plan to grow Atlanta, strengthen its presence
on the East Coast and feed transatlantic and Latin America gateways.
CUSTOMER SERVICE
In March 2002, Delta announced plans to expedite the passenger check-in
process by enhancing its self-service check-in kiosks. E-ticketed customers will
be able to use kiosks to check-in, check baggage, print boarding cards, select
or change seats, request to standby for upgrades, change flights and initiate
multi-party check-in. Delta also plans to install 300 additional kiosks
throughout its domestic operation during 2002, more than tripling the number of
kiosks available to Delta customers. This will make Delta an industry leader in
kiosk check-in technology.
Delta is pleased that the average security and check-in wait times, in
many of its largest markets, are approaching pre-September 11 levels. As a
result, Delta reduced the recommended airport arrival time for passengers on
domestic flights from two hours to at least one hour prior to flight departure
to reduce the amount of time customers must spend in the airport. Also, to help
reduce the "hassle factor" Delta is now offering customers the convenience of
checking-in and printing boarding passes from their personal computer or
Web-enabled personal digital assistant.
Delta will host a webcast to discuss its quarterly earnings today,
April 16, at 10:00 a.m. Eastern Daylight Time. The webcast is available via the
Internet at www.delta.com/inside/investors/index.jsp.
Delta Air Lines, the world's second largest carrier in terms of
passengers carried and the leading U.S. airline across the Atlantic, offers
5,581 flights each day to 410 destinations in 72 countries on Delta, Delta
Express, Delta Shuttle, Delta Connection and Delta's worldwide partners. Delta
is a founding member of SkyTeam, a global airline alliance that provides
customers with extensive worldwide destinations, flights and services. For more
information, visit Delta at delta.com.
Statements in this news release which are not historical facts, including
statements regarding our beliefs, expectations, estimates, intentions or
strategies for the future, may be "forward-looking statements" under the Private
Securities Litigation Reform Act of 1995. All forward-looking statements involve
a number of risks and uncertainties that could cause actual results to differ
materially from the plans, intentions, and expectations reflected in or
suggested by the forward-looking statements. For a list of factors that could
cause these differences, see the Form 8-K that we filed today. We have no
current intention to update our forward-looking statements.
# # #
0401/138-AW
02MARQTR
DELTA AIR LINES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Millions, Except Share Data)
Three Months
Ended
March 31,
2002 2001
(unaudited) (unaudited)
Operating Revenues:
Passenger $ 2,878 $ 3,598
Cargo 111 140
Other, net 114 104
Total operating revenues 3,103 3,842
Operating Expenses:
Salaries and related costs 1,501 1,607
Aircraft fuel 339 514
Depreciation and amortization 281 324
Contracted services 263 257
Landing fees and other rents 203 198
Aircraft maintenance mat'ls and outside repairs 185 187
Aircraft rent 178 188
Other selling expenses 145 179
Passenger commissions 107 141
Passenger service 94 114
Asset writedowns and other non recurring items 40 --
Other 202 248
Total operating expenses 3,538 3,957
Operating Loss (435) (115)
Other Income (Expense):
Interest expense, net (141) (86)
Loss from sale of investments (3) --
Fair value adjustments of SFAS 133 derivatives (28) (17)
Miscellaneous income (expense), net 5 (4)
(167) (107)
Loss Before Income Taxes (602) (222)
Income Tax Benefit, Net 205 89
Net Loss (397) (133)
Preferred Stock Dividends (4) (3)
Net Loss Available
To Common Shareowners $ (401) $ (136)
Diluted Loss Per Common Share: $ (3.25) $ (1.11)
Net Loss - Excluding Unusual Items * $ (354) $ (122)
Diluted Loss Per Common Share -
Excluding Unusual Items * $ (2.90) $ (1.02)
Operating Margin -14.0% -3.0%
Weighted Average Shares Used In Diluted
Loss Per Common Share Computation 123,244 123,031
(in thousands)
STATISTICAL SUMMARY
Revenue Psgr Miles (millions) 23,230 25,285
Available Seat Miles (millions) ** 33,740 37,727
Passenger Mile Yield (cents) 12.39 14.23
Operating Revenue Per Available
Seat Mile (cents) 9.20 10.18
Operating Cost Per Available Seat Mile (cents) 10.49 10.49
Operating Cost Per Available Seat Mile (cents)
Excluding * 10.37 10.49
Passenger Load Factor (percent) 68.85 67.02
Breakeven Passenger Load Factor (percent) 79.26 69.16
Breakeven Passenger Load Factor (percent)
Excluding * 78.30 69.16
Passengers Enplaned (thousands) 24,618 26,932
Revenue Ton Miles (millions) 2,673 2,977
Cargo Ton Miles (millions) 350 437
Cargo Ton Mile Yield (cents) 31.70 31.93
Fuel Gallons Consumed (millions) 599 696
Average Price Per Fuel Gallon (cents) 56.68 73.81
Number of Aircraft in Fleet, End of Period 832 829
Full-Time Equivalent Employees, End of Period 74,300 84,100
* Unusual Items for the periods presented are described below:
Three months ending March 2002 - temporary carrying costs related to
surplus pilots and grounded aircraft and fair value adjustments related
to SFAS 133 derivatives.
Three months ending March 2001 - fair value adjustments related to SFAS
133 derivatives.
** As a result of a pilot strike, Comair suspended its operations between
March 26, 2001 and July 1, 2001. Accordingly, Comair had no Available
Seat Miles during the period.
SELECTED BALANCE SHEET DATA
March 31, December 31,
2002 2001
(unaudited)
Cash and cash equivalents $ 1,513 $ 2,210
Total assets 23,705 23,605
Total debt, including current
maturities and short-term
obligations 9,336 9,304
Capital lease obligations,
short-term and long-term 95 99
Total shareowners' equity 3,411 3,769