ATLANTA - Delta and Northwest, seeking to combine to create the world's largest airline, posted losses Wednesday totaling $10.5 billion for the first three months of the year due to exorbitant fuel prices and write-downs of their companies' value.
Southwest's chief executive, meanwhile, indicated that the carrier wasn't interested in a merger and said the very thought of it was daunting.
The figures from Delta and Northwest follow large losses at other carriers, such as United Airlines parent UAL Corp., which earlier this week reported a $537 million first-quarter loss on higher fuel costs, and likely rank among the industry's largest quarterly losses ever.
That red ink puts into focus the enormity of the challenge the industry faces to become profitable again amid $120-a-barrel oil - even with the benefits that consolidation can bring.
"All airlines are in the same boat," said Calyon Securities analyst Ray Neidl. "The industry cannot make money at the current ticket fare levels. Seats have to come out of the market. To cover higher fuel costs, air fares have to go up."
Atlanta-based Delta Air Lines Inc., the nation's third-largest carrier, said its loss widened in the first quarter to a whopping $6.39 billion. A few hours later, Eagan, Minn.-based Northwest Airlines Corp. reported a $4.1 billion loss for the period.
Delta's results badly missed Wall Street expectations, despite a 12 percent increase in sales.
Excluding special items - primarily a $6.1 billion non-cash charge relating to the drop in Delta's market value due to sustained record fuel prices - the airline lost $274 million in the first quarter.
John Heimlich, chief economist for the Air Transport Association, said the industry is now likely to report a "multibillion loss" this year.
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