Delta, Northwest Report $10.5 Billion Loss Due To Rising Fuel Cost

April 23, 2008 1:10 p.m. EST

Washington, DC (AHN) - Soaring oil prices ate the profits of Delta Air Lines and Northwest Airlines, with the two major air carriers jointly registering a $10.5 billion loss for the first three months of 2008.

Delta had a $6.39 billion loss on account of aviation fuel price hikes and a sharp drop of its market value. Northwest, soon to be purchased by Delta, had a $4.1 billion loss for the same period.

The loss translates into a $16.15 decline per share for Delta. A year ago, Delta logged a loss of $130 million for the first quarter of 2007. At that time the Atlanta-based firm was in bankruptcy.

The merger of the two air carriers, which requires the approval of regulators and stockholders, aims to reduce the gaps in their overseas networks, hike income and cut costs.

According to Bloomberg, Northwest will reduce its domestic capacity by 5 percent after the summer travel season by sidelining up to 20 aircraft.