Delta, American post huge losses

ATLANTA - Delta Air Lines and American Airlines reported big second-quarter losses yesterday, and they signaled that customers should expect more fare hikes because of high fuel costs.

The two airlines said they already see signs of a possible tipping point in terms of lessening passenger demand, but industry observers insisted that will not stop rising fares, more fees and fewer domestic flights.

Delta Air Lines Inc., of Atlanta, reported a $1.04 billion loss in the April-June quarter and Fort Worth, Texas-based AMR Corp., the parent of American, posted a $1.45 billion loss for the quarter.

One-time charges and unprecedented fuel costs impacted both airlines. For example, Delta said it spent $1.68 billion on aircraft fuel and related taxes in the second quarter compared with $1.11 billion a year ago.

The two carriers have posted combined losses of $9.2 billion so far this year.

"Clearly, with fuel at these record levels, there's no question . . . airfares need to go up," Delta president Ed Bastian told reporters.

In another fuel-related development yesterday, the pilots union for US Airways said the airline pressured some pilots to load less fuel than they was felt safe in order to save money. Eight senior pilots and the union have filed complaints with the Federal Aviation Administration, a union spokesman said.

US Airways spokesman Morgan Durrant said the eight pilots routinely requested more fuel than the 60- to 90-minute safety margin required by the airline - more than the FAA requires.

The number of domestic passengers carried by U.S. airlines decreased 3.3 percent in April from a year earlier, the government said.

AMR chairman and chief executive Gerard Arpey described American's fare and fee increases as moves that are "bumping up against a couple of hard realities."

"In a sluggish economy, consumers are even more sensitive to price, and when we raise fares we inevitably motivate some would-be travelers to just stay home," he said in a memo to employees.

Delta's loss for the three months ending June 30 amounted to $2.64 a share compared with a profit of $1.59 billion a year ago when Delta emerged from bankruptcy protection.

American's parent AMR, said its loss in the second quarter was equivalent to $5.77 a share compared with a profit of $317 million, or $1.08 per share, a year ago.