American and Delta Report Results

Delta Air Lines reported a $137 million profit, excluding special charges for the second quarter of 2008, despite unprecedented fuel prices that increased costs by more than $1 billion.  Including special charges of $1.2 billion, Delta’s reported net loss for the June 2008 quarter was $1 billion. The airline also said that its merger with Northwest Airlines is targeted to close during the fourth quarter of 2008. Delta said it expects approximately $2 billion in annual merger-related synergies by 2012, with cash integration costs of approximately $600 million over three years.

AMR, the parent of American Airlines, reported a $284 million second quarter loss, excluding special items, and said that record fuel prices drove $838 million in higher costs. AA also said its second quarter net loss of $1.4 billion included $1.2 billion in non-cash impairment charges and severance-related charges. American also said it ended the second quarter with $5.5 billion in total cash. AA’s net loss was $1.4 billion for the second quarter of 2008.

“Our company continues to be severely challenged by the fuel crisis that has afflicted our entire industry, and we expect these difficulties to continue for the foreseeable future,” said AMR Chairman and CEO Gerard Arpey. “Clearly, our second quarter results were disappointing, but I am also pleased with our efforts as a company to take difficult yet necessary steps to manage through this uncertainty.”

Arpey said: “ While we believe the airline industry cannot continue, in its current form, at today’s record fuel prices, we also believe our decisions and hard work by employees in recent years have better prepared us to face these challenges. We remain committed to taking action– whether that relates to capacity reductions, revenue enhancements, fleet changes or other efforts to improve our financial foundation – as we work to secure our long-term future.”

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