By James Pilcher
The Cincinnati Enquirer

Delta Air Lines Wednesday reported a first-quarter loss of $383 million, burning through about $500 million of its cash reserves, with company officials using the poor performance as another chance to push for pilot pay cuts.

The results translated to a loss of $3.12 per share, which was worse than the $2.95 loss per share predicted by analysts surveyed by Nelson Information/Thomson Financial.

"Continued losses of this magnitude are unsustainable," said Delta chief executive officer Gerald Grinstein. "Delta must regain sustained profitability so we can compete effectively. The urgent task is to achieve a competitive cost structure so that Delta can generate a positive cash flow, reduce its debt burden and return to profitability."

The loss was narrower than for the first quarter of last year, when Delta lost $466 million, or $3.81 per share. Delta operates its second-largest hub at the Cincinnati/Northern Kentucky International Airport, where it employs more than 8,000 workers, including those at regional subsidiary Comair.

That number includes nearly 800 Delta pilots based locally. The company is pressing for a 30 percent pay cut from its pilot union, cuts Delta says are needed to reduce costs and make the company competitive.

The union has countered with an offer to cut pay by 9 percent, saying it would free up Delta to restructure its debt, which Grinstein said has reached more than $20 billion.

Union spokesman Chris Renkel said Wednesday there haven't been any talks since January and that the company has not budged from its initial proposal.

"It's been presented as take it or leave it, and that does not provide a framework for a settlement," Renkel said.

Some experts predict the airline industry could lose as much as $1.5 billion during the period.

Delta's loss came as revenues increased to nearly $3.1 billion, up 4.1 percent from the $2.9 billion recorded last year. Traffic increased 6 percent across Delta's system as well. And the company said nonfuel costs went down 3.8 percent.

The company's stock closed unchanged Wednesday at $7.70. But Delta's shares are down nearly 80 percent from where they were trading just before the Sept. 11 terror attacks, which threw the airline industry into turmoil.

"These results clearly show the progress we have made in reducing costs through our profit improvement initiatives," said Delta executive vice president and chief financial officer M. Michele Burns.

Fuel costs, however, went to $574 million on the quarter, up 12.3 percent compared with the first quarter of last year. The company said it sold its "hedging" contracts, or agreements to buy fuel at preset prices, for $83 million.

Delta now has $2.2 billion in cash reserves available, down from $2.7 billion at the beginning of the year.

E-mail jpilcher@enquirer.com