Delta’s 3rd-Quarter Loss Widens to $326 Million

Delta Air Lines, leading a parade of dismal third-quarter reports expected from the airlines this week, on Tuesday posted a loss of $326 million for the period and warned that more job cuts are ahead.

The nation’s third-largest airline also plans to further pare its flight schedule, defer delivery of 29 new jetliners and mothball its fleet of 15 MD-11 jumbo jets as Atlanta-based Delta--like all the carriers--slashes costs to match the persistent slump in air travel.

“We do not see a near-term improvement,” Michelle Burns, Delta’s chief financial officer, told analysts in a conference call. “We have a daunting road ahead.”

With the exception of Southwest Airlines, most major carriers will post third-quarter losses this week. The entire industry lost about $1.6 billion in the three months ended Sept. 30, analysts estimate.

Delta’s loss, equal to $2.67 a share, widened from a loss of $259 million, or $2.13 a share, a year earlier when the period included the unprecedented shutdown of air travel after the Sept. 11 attacks.

Delta said revenue for the third quarter was flat at $3.4 billion.

Delta Chairman Leo F. Mullin told analysts that the carrier’s losses “will require us to announce in the very near future, to our utmost regret, staffing reductions beyond the 1,500 flight-attendant positions throughout the company already indicated.” He declined to be more specific. Delta had 76,000 employees at the quarter’s end, 7,000 fewer than a year earlier.

The airline also said it had $1.7 billion of cash and aircraft valued at about $5 billion that it could pledge for additional financing.

Even so, analyst Jim Higgins of Credit Suisse First Boston said Delta still could face a cash crunch because of its underfunded pension plan and any further drop in travel caused by a war with Iraq. “If our estimates on that front are close, a reasonable forecast of the impact of an Iraqi war could place Delta on the brink of bankruptcy,” he said in a note to clients.

But if Delta avoids that fate, its stock could benefit as Delta slims down, he added. Indeed, despite the latest loss, Delta’s stock jumped $1.59 a share, or 21%, to $9.09 on the New York Stock Exchange.

Times wire services were used in compiling this report.