Delta Air Lines Says 4Q Results Will Be Sharply Below Estimates
(1/5/01 2:53:23 PM PT)
ATLANTA -- Delta Air Lines Inc. warned its fourth-quarter earnings will miss analysts' expectations,
citing significant flight cancellations due to crew shortages and severe weather.
The nation's third-largest carrier said Friday it expects earnings for the quarter to come in between 55
cents and 65 cents a share, excluding noncash accounting adjustments.
The mean estimate of analysts surveyed by First Call/Thomson Financial called for earnings of 97
cents a share in the latest quarter. Delta (DAL) reported earnings of $175 million, or $1.24 a diluted
share, excluding items, on revenue of $3.71 billion in the year-earlier period.
For the latest fourth quarter, the airline said it expects to report revenue some $65 million to $75
million lower than previously anticipated. The company canceled approximately 7,500 flights during
December.
Earlier this week, Delta said it will cut its available seat miles by about 1% in January, 4% in February
and 3.5% in March. It cited an anticipated pilot shortage. Seat miles are calculated by multiplying the
number of seats available times the number of miles flown.
The carrier canceled more than 500 flights a day Sunday and Monday because of a crew shortage,
compared with normal levels of one or two such cancellations a day, according to spokesman Russ
Williams.
Delta took the Air Line Pilots Association and individual pilots to court in November, complaining that
they were coordinating a no-overtime campaign to pressure the company in current labor contract
negotiations. While acknowledging the sharp rise in the number of pilots refusing to fly overtime,
ALPA spokesman Gregg Holm said the union isn't promoting any concerted job action. The union
represents Delta's 9,400 pilots.
Under their labor agreement, Delta pilots are free to decline to fly overtime. But Delta, as well as other
major carriers, relies on overtime flying to complete part of its schedule.
Final results for the fourth quarter will be released on Jan. 18, the company said. Delta recently
switched its accounting from a fiscal year, ended June 30, to a calendar year, ending Dec. 31.
Separately, Delta said its December traffic rose 1.5% to 8.39 billion revenue passenger miles from
8.27 billion last year.
A revenue passenger mile is one paying passenger flown one mile. Load factor, or percentage of seats
filled, was 68.1%, compared with 65.5% in December 1999.
For the calendar year, Delta flew 113 billion revenue passenger miles, an increase of 3.9% over last
year's 108.7 billion. Load factor for the year was 72.9%, compared with 71.9% in 1999. Delta said
system capacity fell 2.3% because of the bad weather and reduced flying time by some pilots.
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