DL Regionals in Black, 60+ RJs to Go

Delta Connections contributed $1.039 billion to Delta’s consolidated revenues of $4.7 billion during the first quarter. While regional revenues were up 10 percent and consolidated revenues were up 12 percent, they could not compensate for major carrier’s net loss excluding special items was $274 million compared to a net loss of $6 million in the first quarter of 2007, excluding special and reorganization items. The $268 million year-over-year increase in net loss was driven by a $585 million increase in costs owing to higher fuel prices.
Contract carrier service expenses rose 25 percent to $896 million during the quarter when both contracted and pro-rate carriers included Atlantic Southeast, Freedom, Chautauqua, Shuttle America, SkyWest, ExpressJet and Pinnacle.
As part of its efforts to cut costs it is shedding 60 to 70 regional jets by the end of this year along with 15 to 20 mainline jets. It said it continues to evaluate the fuel and demand environment and will make proactive changes quickly if economic conditions warrant. On March 18, Delta announced that it had aggressively recalibrated its 2008 business plan with a focus on preserving liquidity in light of the significant increase in crude oil prices.
The airline reevaluated its capacity, targeting reductions in or cancellations of unprofitable routes, and has already implemented schedule changes to bring down domestic flying. Delta now expects system capacity for the second half of 2008 to be down 0-2 percent compared to 2007, with domestic capacity down nine to 11 percent.