Delta Air Lines Reports 2009 Financial Results

ATLANTA, Jan. 26 /PRNewswire-FirstCall/ -- Delta Air Lines (NYSE: DAL) today reported financial results for the December quarter and full year 2009. Key points include: -- Delta's net loss excluding special items(1) for the December...

ATLANTA, Jan. 26 /PRNewswire-FirstCall/ -- Delta Air Lines (NYSE: DAL) today reported financial results for the December quarter and full year 2009. Key points include:

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"2009 was a difficult year by any measure and my thanks go out to the Delta people for their hard work through this challenging time," said Richard Anderson, Delta's chief executive officer. "As a result of the strategic pieces we put in place in 2009 and the strong momentum of our merger integration, Delta is now positioned to capitalize on the economic recovery under way and expects to generate positive RASM improvements each month of this year."

Revenue Environment

Delta's operating revenue on a GAAP basis grew 1% to $6.8 billion in the December 2009 quarter compared to the prior year period as a result of its merger with Northwest. On a combined basis, total operating revenue declined nearly $1 billion, or 12%, and total unit revenue (RASM) declined 5% in the December 2009 quarter compared to the 2008 quarter.

On a combined basis:

Comparisons of revenue-related statistics are as follows:

"Our revenue performance this quarter showed indications of economic recovery with increased corporate travel demand, strong load factors and sequential RASM improvement each month," said Ed Bastian, Delta's president. "With initiatives in place to broaden our network through new alliances, invest $1 billion in our fleet and product and reallocate our global fleet under our single operating certificate, we have built the foundation for further RASM improvement this year."

Cost Performance

In the December 2009 quarter, Delta's operating expense on a GAAP basis decreased approximately $1 billion year over year primarily due to lower restructuring and merger-related items. Excluding special items, operating expense decreased $1.2 billion due to lower fuel expense, reduced capacity, productivity improvements and merger benefits in the December 2009 quarter compared to the prior year period on a combined basis. These cost reductions were partially offset by investments in Delta's product, increased employee wages and higher pension expense.

On a combined basis:

"Delta's strong financial foundation and unmatched merger benefits allowed us to keep our full year unit costs contained and grow our unrestricted liquidity to $5.4 billion," said Hank Halter, chief financial officer. "We are well positioned for 2010 with more than 50% of our debt maturities already addressed and plans to keep our non-fuel unit costs flat to 2009."

Fuel Price and Related Hedges

Delta hedged 40% of its fuel consumption for the December 2009 quarter, for an average fuel price(4) of $2.17 per gallon. The table below represents the fuel hedges Delta had in place as of Jan. 22, 2010:

Liquidity Position

As of Dec. 31, 2009, Delta had $5.4 billion in unrestricted liquidity, including $4.7 billion in cash and short-term investments and $685 million in undrawn revolving credit facilities. Operating cash flow during the December 2009 quarter was negative $75 million, reflecting the pre-tax loss and the seasonal declines in air traffic liability.

During the quarter, the company completed a total of $1.1 billion in financing transactions, including $689 million from the 2009-1 EETC offering to refinance 27 aircraft (of which $347 million remains in escrow), $150 million from the issuance of unsecured municipal bonds and $250 million in new revolving credit facilities. Northwest's $300 million undrawn revolving credit facility terminated on its scheduled maturity date. Debt and capital lease payments for the December 2009 quarter totaled $628 million, which included repaying the original financing for five aircraft in the 2009-1 EETC.

Capital expenditures during the quarter were approximately $175 million, which included $136 million for investments in aircraft, parts and modifications.

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