Delta's loss trails profit for AirTran

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ATLANTA --- Delta Air Lines Inc. and AirTran Airways posted contrasting financial results, but had a similar message Wednesday about the state of the airline industry: A near-term revenue recovery is unlikely.

Discount carrier AirTran has been able to find ways to stay in the black. Its parent posted a $78.4 million profit for the April-June quarter, while Delta, the world's biggest airline operator, continues to rack up the red ink, as it recorded a $257 million loss for the quarter.

The news followed hefty second-quarter losses reported by Continental Airlines Inc. and American Airlines parent AMR Corp., while United Airlines parent UAL Corp. posted a small profit. Discount carrier Southwest Airlines Co. also had a profit. US Airways Group Inc., JetBlue Airways Corp. and Alaska Air Group Inc. were to report results today.

Investors have been paying close attention to airlines' cash positions.

Delta had $5.4 billion in unrestricted cash as of June 30, though it expects that to fall to $5 billion by the end of September. AirTran, a much smaller carrier with fewer financial obligations, ended the second quarter with $389.4 million in unrestricted cash.

"We may face some tough choices," Delta CEO Richard Anderson said during a conference call with analysts and reporters. He didn't offer specifics.

Chief Financial Officer Hank Halter told workers in a memo that given the current environment the airline can't guarantee there won't be involuntary furloughs of frontline employees.

Delta executives said they don't expect any meaningful recovery for the remainder of the year.

Although AirTran's parent, Orlando, Fla.-based AirTran Holdings Inc., reported a profit, revenue fell almost 13 percent.

"The consumer is pinched, and now the consumer is looking for deals," AirTran CEO Bob Fornaro told The Associated Press.

AirTran, like other carriers, has cut capacity, sold and deferred aircraft and unwound fuel hedges. However, its capacity reductions have been smaller than other carriers, and it has been adding service in some areas, including Milwaukee.

EARNINGS REPORTS

SUNTRUST BANKS INC. on Wednesday reported a $164 million loss for the second quarter, hurt by higher credit costs and the absence of a gain on the sale of stock a year earlier. The Atlanta-based bank said it lost 41 cents per share in the period ending June 30. That compared with a profit available to common shareholders of $530 million, or $1.52 per share, in the prior-year quarter.

PFIZER INC. said Wednesday that its second-quarter profit plunged 19 percent, as the strong dollar pulled down revenue, and higher taxes and costs for its pending purchase of Wyeth hurt the bottom line. Pfizer said net income in the quarter ended June 28 was $2.26 billion, or 34 cents per share. Net income was $2.78 billion, or 41 cents a share, in the second quarter of 2008.


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