ATLANTA — Delta Air Lines announced in its annual shareholders report released Tuesday that it expects a net loss for 2003, citing rising costs, declining demand and increased competition that have plagued the airline industry since Sept. 11, 2001.
Delta, which lost $1.3 billion in 2002, has responded by cutting staff and flights while increasing the airline's liquid assets, the report said, but many challenges remain.
"Clearly, the airline industry will face additional uncertainty and continued duress in the months ahead," Delta chief executive Leo Mullins wrote in a letter to shareholders.
Mullins added that analysts don't expect a recovery before 2004, at minimum.
The report also predicts a greater first-quarter net loss in 2003 than the one in 2002, which amounted to $397 million, or $3.25 a share.
To compensate, the report said the carrier has cut passenger capacity on Delta routes by 16 percent since Sept. 11. It has also trimmed staff by approximately 16,000, or 21 percent. Delta announced Monday an additional 12 percent reduction in flights.
The war in Iraq, the bankruptcy of major competitors United and US Airways and the possible bankruptcy of other airlines could affect Delta's ability in 2003 to stem losses and secure financing in capital markets, according to the report.
Costs are expected to continue rising in 2003, the company said, including a jump of approximately $600 million to $800 million from the 2002 levels for pensions, interest and fuel.
Delta, which has a hub at Salt Lake City International Airport, has about $700 million of current debt maturities and capital lease obligations due in 2003.