Operating revenues at US Airways rose 1.6% to $1.8 billion in the third quarter, however, expenses increased 9.3% to $1.98 billion. This produced a $177 million operating loss.
For the nine months ended Sept. 30th, US Airways reported a $375 million net loss.
United Airlines’ parent firm UAL Corp. reported a $274 million loss in the third quarter. This was an improvement over the $367 million net loss for the same period a year earlier.
“United’s financial performance, like the rest of the industry, was severely impacted by low yields and the soaring cost of fuel during one of the traditionally most profitable periods, said Jake Brace, chief financial officer.
Continued weakness in the revenue environment, coupled with record high fuel prices, make it unlikely the company will be able to comply with covenants of its debtor-in-possession financing in the fourth quarter. The company says it is in discussions with lenders regarding the situation.
For the nine months ended Sept. 30th, UAL reported a net loss of $980 million, an improvement over the $2.33 billion loss in the corresponding 2003 period.
Delta Air Lines, which has thus far managed to avoid bankruptcy, reached a five-year agreement with pilots that will result in $1 billion in annual savings. Despite the combination of pay cuts, changes to pensions, other benefits, and work rules, the airline remains in a precarious situation and could still be forced into bankruptcy.
Delta pilots have until Nov. 11th to vote on an agreement that calls for a 32% wage reduction but gives them options to purchase roughly 30 million shares of Delta common stock, representing a 15% equity stake.
The Delta plan also calls for the airline to “de-hub” its Dallas/Ft. Worth operation and for fleet simplification.
In related news, Delta announced it had entered into a commitment letter with GE Commercial Finance under which GE will provide $500 million of financing to the airline.The GE financing breaks down as $300 million in senior secured revolving credit and $200 million in a senior secured term loan.Up to $100 million of the financing will come from its recent deal with American Express Travel Related Services Co.(see – Delta Pulls Out Its Corporate Card).
