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Three of the nation's largest airlines Thursday blamed huge second quarter losses on the air travel slump and the need to lure passengers with cheaper fares. But Southwest Airlines, the leading low-cost carrier, remained profitable even as its margins were squeezed under harsh business conditions.
The combined $527 million in losses announced by Delta, Northwest and US Airways comes on the heels of steep losses by their rivals. Earlier this week, American and Continental reported losses of $495 million and $139 million, respectively.
The nine largest carriers are expected to report a combined quarterly loss of $1.3 billion.
With the outlook for the next six months also grim, analysts are predicting losses for the year to reach $5.5 billion. Major carriers lost $2.4 billion during the first three months of 2002.
During the second quarter, passenger traffic fell 10 percent, according to UBS Warburg analyst Samuel Buttrick. Because average ticket prices were down sharply, revenue per passenger dropped 17 percent, Buttrick said.
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Delta lost $186 million in the second quarter, more than double the loss of $90 million in the same period a year ago. Revenue declined 8 percent to $3.47 billion.
Northwest, the fourth-largest carrier, posted a second-quarter loss of $93 million, considerably steeper than the loss of $55 million during the same period in 2001. Revenue was down 11 percent to $2.41 billion.
US Airways Group, the sixth largest airline, said its second quarter loss grew tenfold to $248 million. Revenue declined 24 percent to $1.9 billion.
Southwest said its profit was down 42 percent to $102 million from $176 million a year earlier. Revenue fell 5 percent to $1.47 billion.
Shares of Southwest fell 65 cents to $13.28 on the NYSE. Shares of Delta rose 10 cents to $16.55 Thursday on the NYSE. Northwest shares rose 42 cents to $9.88.<
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