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Thursday, 18 July, 2002, 18:43 GMT 19:43 UK
US airline losses persist
US Airways Boeing 757
US Airways is linking up with Midway to salvage jobs
Airlines in the United States are continuing to lose money as passengers numbers remain below the levels seen before suicide hijackers destroyed the World Trade Centre.

Only budget carrier Southwest Airlines was in profit during the three months from April to July.

Delta Air Lines and Northwest Airlines both reported big increases in their losses compared to a year ago, before the 11 September attacks.

Difficult times are not yet behind us

Delta Air Lines chairman

Aviation analysts expect losses at the eight biggest airlines in the US to tally $1.4bn for the April to July period.

But the picture is brighter than in the first three months of this year, when the eight lost a collective total of $2.4bn, analysts say.

Discounted tickets have played a role in encouraging Americans to fly, but have reined in earnings for many airlines.

Tough times ahead

Delta's financial performance is "recovering slowly", according to Leo Mullin, the airline's chairman and chief executive.

Airline losses, April to July
American - $495m
Continental - $139m
Delta - $90m

But he warned that the "difficult times are not yet behind us".

Delta, which is the US' third biggest airline, posted a loss of $90m. This was more than double the loss it made in the same period of 2001 - a reminder that the airline industry's troubles did not start on 11 September.

Delta's sales fell 8% to $3.47bn from $3.77bn.

The proportion of seats filled - or passenger load factor in the industry's jargon - improved slightly to 73% from 72% in the same three months of last year.

But the airline has reduced its capacity and had 6% fewer seats.

Northwest Airlines ranks fourth among the US' carriers.

It racked up a loss of $93m between April and July, compared to $55m in the same period a year ago.

It has shed 10.3% of its capacity since the same time last year.

"Like other carriers, Northwest's better-than-expected results can be explained by better cost controls," said Jamie Baker, an airline analyst with investment bank JP Morgan.

Low-cost sector flys high

Although Southwest Airlines outflanked the rest of the industry by reporting a profit, it saw those profits drop 42%.

Southwest, which is based in Dallas, Texas, reported net profits of $102.3m and core profits of $84.5m once exceptional gains were stripped out.

It made net profits of $175.6m in the same three months of 2001.

Sales fell 5% lower to $1.47bn, compared to $1.55bn.

Tie-up gives job hope

The news came a day after American Airlines, the biggest US carrier, reported a loss of $495m for April to July, whilst second-ranked Continental on Tuesday posted losses of $139m.

Meanwhile, struggling US Airways has said it will team up with Midway Airlines with a plan which will provide jobs for some of its laid-off pilots.

Under a service agreement, Midway will become US Airways Express, running 50-seater jets from October. Half the pilots job are to be filled by staff already laid off by US Airways.

Midway stopped flying after 11 September but received a $12.5m rescue package from the US federal authorities.

Airlines around the world are cutting staff after the terror attack

US airline crisis

UK and Europe

Aerospace industry

Travel and tourism

Global impact

See also:

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