High fuel prices cut into earnings at three US airlines on Thursday, with Northwest and Delta reporting sharply wider losses in the first quarter and JetBlue, the low-cost carrier, seeing profits fall despite a rise in revenues.
Northwest, the fourth biggest US carrier, saw its net loss nearly double to $458m, from negative $230m in the same period a year earlier. Delta’s quarterly loss widened to $1.1bn from $383m a year earlier.
JetBlue’s profits fell 54 per cent in the first quarter due to higher fuel prices, but saw its operating revenues increase almost 30 per cent. The airline reported revenues of $374m, up 29.5 per cent from $289m in the first quarter last year, but saw its operating income fall to $25.7m from $32.7m on higher fuel costs.
Net income for the quarter was $7m, or six cents per diluted share compared with $15.2m or 14 cents per share in the same quarter last year.
David Neeleman, chief executive, said that excluding fuel costs the airline’s operating margin actually improved slightly over last year. “Looking ahead, we’re seeing good strength in the second quarter,” he said in a statement.
Revenues at Delta, the third biggest US carrier, also rose in the quarter. Its losses included a charge for pension benefits for workers it plans to cut. Still, without that charge, losses would have climbed steeply, to $684m, from the year-ago period.
All three airlines focused on fuel prices in explaining the disappointing earnings. “Record high fuel prices and increasingly non-competitive labour costs on the expense side, and excess capacity and competitors’ pricing decisions on the revenue side negatively affected our performance during the quarter,” said David Steenland, Northwest’s chief executive.
His airline’s losses were bigger than analysts had expected, coming in at $5.07 per share compared with Wall Street forecasts of $4.43 per share.
Shares in Northwest were trading slightly down on Thursday morning in New York. JetBlue stock rose 3.4 per cent in early trade to $20.13, and Delta rose 3.3 per cent to $3.77.
“Based on slightly better first-quarter cash and yesterday’s introduction of Delta-specific pension legislation, shares are expected to move higher from current levels,” JP Morgan analyst Jamie Baker told Reuters.
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