Delta Airlines 2006 Annual Report Download - page 37

Results of Operations — 2005 Compared to 2004
Net Loss
Our consolidated net loss was $3.8 billion in 2005 and $5.2 billion in 2004. The net loss for 2005 includes an $888 million charge to restructuring, asset
writedowns, pension settlements and related items, net (see “Restructuring, asset writedowns, pension settlements and related items, net” below) and an $884
million charge to reorganization items, net (see “Reorganization Items, Net” above). As discussed below, the net loss for 2004 includes a $1.9 billion
impairment of intangible assets related to the write-off of goodwill associated with ASA and Comair and a $1.2 billion income tax provision primarily related
to recording a valuation allowance for our deferred income tax assets.
Operating Revenue
Year Ended
December 31, Increase % Increase
(in millions) 2005 2004 (Decrease) (Decrease)
Operating Revenue:
Passenger:
Mainline $ 11,399 $ 10,880 $ 519 5%
Regional affiliates 3,225 2,910 315 11%
Total passenger revenue 14,624 13,790 834 6%
Cargo 524 500 24 5%
Other, net 1,043 945 98 10%
Total operating revenue $ 16,191 $ 15,235 $ 956 6%
Operating revenue totaled $16.2 billion for the year ended December 31, 2005, a $956 million, or 6%, increase compared to the year ended December
31, 2004. Passenger revenue increased 6% on a 3% increase in capacity. The increase in passenger revenue reflects a 6% rise in RPMs and a flat passenger
mile yield. The relatively constant passenger mile yield reflects our lack of pricing power due to the continuing growth of low-cost carriers with which we
compete in most of our domestic markets, high industry capacity and price sensitivity by our customers, enhanced by the availability of airline fare
information on the Internet. During the fourth quarter of 2005, passenger mile yield increased 8% compared to the fourth quarter of 2004, which reflects a
general improvement in the overall business environment and the structural changes we made to strengthen our route network since our Chapter 11 filing.
Year Ended
December 31,
2005
Increase (Decrease)
Year Ended December 31, 2005 vs. 2004
Passenger Passenger Passenger Load
(in millions) Revenue Revenue RPMs Yield RASM Factor
Passenger Revenue:
North American passenger revenue $ 11,503 4 % 4 % — 3% 2.2
International passenger revenue 3,003 17 % 13 % 4% 4% —
Charter revenue 118 (2)% (25)% 30% 20% (3.6)
Total passenger revenue $ 14,624 6 % 6 % — 3% 1.8
North American Passenger Revenue. North American passenger revenue increased 4% due to increased traffic in 2005. In the first half of 2005 yields
averaged 5% below the first half of 2004, while in the second half of 2005 yields averaged 5% higher than the second half of 2004.
International Passenger Revenue. Higher international passenger revenue reflects a capacity increase of 13%. RPMs also increased 13%, while
passenger mile yield increased 4%. Passenger RASM increased 4% to 8.45¢ and load factor remained consistent with the prior year. These increases reflect
increases in service to international destinations, primarily in transatlantic markets.
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