US Airways, Delta post losses, blame fuel costs

Surging fuel costs hampered US Airways Group and Delta Air Lines in the first quarter, with both airlines reporting losses Tuesday.

US Airways said that traffic and revenue were up during the first three months, but that rising fuel costs, winter weather, and the Japan crisis weighed on results.

Philadelphia's dominant airline posted a loss of $114 million, or 71 cents a share - more than double the $45 million loss, or 28 cents a share, a year ago.

"Our first-quarter results were clearly impacted by the extremely high price of oil," said US Airways chief executive officer Doug Parker.

US Airways is Philadelphia's dominant airline.

Delta Air Lines, the nation's second-largest carrier, said it lost $318 million, or 38 cents a share, compared with a loss of $256 million, or 31 cents a share, a year ago.

Delta was impacted by 30 percent higher fuel costs, a $90 million loss due to winter storms, and $35 million in losses from the earthquake and tsunami in Japan.

"Fuel is the biggest challenge facing this industry, and Delta is actively reducing capacity, implementing fare actions, hedging our fuel needs, and attacking our cost structure in order to offset fuel's impact," said Delta's CEO Richard Anderson.

Southwest Airlines Co. was the only major carrier to report a modest first-quarter profit - $5 million, or 0.03 a share - last week, while United Continental Holdings reported a loss of $213 million on $560 million high fuel costs, and American Airlines posted a loss of $436 million, as its fuel bill rose by $366 million for the quarter.

Airlines have responded by raising fares, reducing seat capacity, and putting expansion plans on hold.

Delta expects to cut flights and airplane seats systemwide by 4 percent after Labor Day, and trim trans-Atlantic flying by 8 percent to 10 percent after the traditionally busier summer.

Airlines said passenger demand continues to rebound after the recession. Delta said traffic rose 1 percent and revenue grew 13 percent in the first three months.

US Airways' traffic climbed 4.5 percent and revenue grew 12 percent in the quarter, but fuel costs jumped about 32 percent. Had fuel remained at March 2010 levels, US Airways' fuel expenses would have been $240 million lower.

Meanwhile, air travelers can expect ticket prices to keep rising.