(Reuters) - Delta Air Lines Inc (DAL.N) reported a quarterly operating loss, but said it expects profits for the current second quarter and full year despite higher fuel costs.
Excluding special items, which amounted to a $163 million gain overall in the latest period, Delta had a loss of 5 cents a share.
Net income came to $124 million, or 15 cents a share, in the first quarter, compared with a loss of $318 million, or 38 cents a share, a year earlier.
The special items included $151 million in mark-to-market gained for fuel hedges that settle in future periods and a $39 million gain tied with the exchange of slots at New York and Washington, D.C., airports. There was also a $27 million charge related to fleet, facilities and other items.
Revenue rose 9 percent to $8.4 billion.
U.S. carriers have cut back service, added fees for luggage and raised ticket prices to address rising fuel costs and improve their financial performance following the 2008-09 downturn.
Atlanta-based Delta, the second-largest airline behind United Continental Holdings (UAL.N), has reduced flying to less-profitable cities, retired least fuel-efficient planes and consolidated facilities to cut costs. At the same time, it has also invested in new airplane seats and better food and wine offerings to boost sales.
As the skittish economy crimps activity in Europe and the United States, Delta is expanding ties in emerging markets to fuel growth. It has agreed to invest in Brazil’s Gol Linhas Aereas and expanded a partnership with Aeromexico to increase access to those markets.
Reporting by Karen Jacobs; Editing by Gerald E. McCormick, Dave Zimmerman