Delta forecasts USD1.1 billion net loss for 2009; US Airways, United Airlines tumble

The majority of North and South American carriers stocks fell on Tuesday (15-Dec-2009), after IATA forecast further losses for airlines in 2010, despite the AMEX Airline Index currently up 50% year-on-year, in anticipation of an economic recovery in 2010.

IATA revised its financial outlook for 2010 to an expected USD5.6 billion global net loss, larger than the previously forecast loss of USD3.8 billion. For 2009, IATA maintained its forecast of a USD11 billion net loss.

North American carriers are expected to see losses reduced from USD2.9 billion in 2009 to USD2.0 billion in 2010. The relative improvement is largely the result of pricing power and cost reductions gained through capacity adjustments. Latin American carriers are meanwhile expected to be the only profitable regional grouping in both 2009 and 2010. The profit in each year is expected to be USD100 million, largely due to the benefit of relatively strong economies in South America and the efficiencies gained through regional airline structures.

Delta forecasts USD1.1 billion net loss for 2009

Delta Air Lines (-1.3%) made its own forecast during trading, with President, Ed Bastian, stating the carrier expects to report a loss of USD1.1 billion in 2009. However, Mr Bastian added 4Q2009 revenue trends have suggested financial performance will improve in 2010.

The carrier now expects unit revenues to return to positive growth in 1Q2010, and consistently achieve a 10-12% margin and a decent return on investment, to be achieved through maintaining current capacity and cost levels.

See: Delta Air Lines targets double-digit margins

Fellow network carriers, US Airways (-4.6%) and United Airlines (-4.1%) meanwhile took the largest falls on Tuesday.

BTS reports 3.7% drop in employment in Oct-2009

US carriers employed 3.7%fewer workers year-on-year in Oct-2009, the 16th consecutive decrease in full-time equivalent employee (FTE) levels, the DOT Bureau of Transportation Statistics (BTS) reported during trading. 

Six of the seven network airlines decreased employment year-on-year during the month, with  Delta Air Lines the lone network carrier to increase employment. LCCs Southwest Airlines, Spirit Airlines and Frontier Airlines also reported decreases. Regional carriers American Eagle Airlines, SkyWest Airlines, ExpressJet Airlines, Comair, Atlantic Southeast Airlines, Pinnacle Airlines, Horizon Air, Mesa Airlines, Air Wisconsin Airlines, Mesaba Airlines, PSA Airlines and Colgan Airlines also reported reduced employment levels compared to last year.

North & South America selected airlines daily share price movements (% change): 15-Dec-09