Big Loss for Merging Airlines (Folo) Profit Up at Boeing and General Dynamics

By Jeff Bailey

Delta Air Lines and Northwest Airlines, preparing to merge amid a steep industry downturn, reported a combined first-quarter loss of $10.5 billion Wednesday, most of it an accounting recognition that the two carriers were worth far less than when they emerged from bankruptcy a year ago, Jeff Bailey reported from Chicago.

Across the industry, carriers are reeling from a huge increase in fuel costs – roughly 50 percent above first-quarter prices in 2007 – and preparing for a decline in demand with the economy faltering. A handful of bankruptcies among smaller carriers already this year could grow to include bigger ones if oil remains above $100 a barrel.

Delta and Northwest plan to merge and hope the combination produces savings and other efficiencies of more than $1 billion by 2012. Others are in merger discussions, too.

Originally published by The New York Times Media Group.

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