Global Airlines Are Forced Taking New Steps to Control Costs and Boost Revenue

Delta Air Lines Inc.'s second-quarter loss narrowed on a year-earlier write-down as the company continued to suffer from declines in demand.

Photo: Global Airlines Are Forced Taking New Steps to Control Costs and Boost Revenue

Steep declines in business travel amid the economic downturn have been taking a heavy toll on global airlines, offsetting the benefits of lower fuel prices and forcing them to take new steps to control costs and boost revenue, Wall Street Journal reports.

Excluding merger-related expenses and fuel-hedge losses, the Atlanta carrier said it earned a net profit of $191 million. Passenger revenue fell 25% from last year because of the global economic recession, with an estimated $125 million to $150 million impact from the swine flu virus, the company said. Costs in the quarter were up 2% after excluding fuel expenses, MarketWatch reports.

Delta Air Lines beats by $0.05, reports revs in-line Reports Q2 (Jun) loss of $0.24 per share, excluding non-recurring items, $0.05 better than the First Call consensus of ($0.29); revenues rose 27.3% year/year to $7 bln vs the $6.94 bln consensus. Delta has achieved more than $200 million in synergy benefits from its merger with Northwest Airlines in the first half of 2009, and expects to generate at least $500 million in total synergies in 2009. Synergies achieved year to date have improved revenue from increased market share, Delta's affinity card agreement and alignment of frequent flyer programs. In addition, costs have been reduced through streamlined overhead, facilities and technology, elimination of dedicated freighter flying and supply chain savings, MSN Money reports.