By Karen Jacobs
ATLANTA (Reuters) - Delta Air Lines Inc
Shares of Delta were modestly up in morning trade as other airlines moved higher.
"It looks like (Delta) did a good job containing costs," said Morningstar analyst Basili Alukos.
Some flights resumed in Europe as some airports reopened after five days of closures caused by the ash cloud but officials said the travel disruption was expected to continue [ID:nLDE63I2FA].
The company's first-quarter loss narrowed to $256 million, or 31 cents a share, from $794 million, or 96 cents a share, a year earlier.
Excluding items including a $10 million charge tied to the Venezuela currency devaluation, the loss came to 23 cents a share, in line with analysts' expectations on average, according to Thomson Reuters I/B/E/S.
Operating revenue rose 2 percent to $6.85 billion despite a $65 million hit from flight cancellations tied to snowstorms earlier this year. Operating expenses fell 5 percent, helped by an 11 percent drop in fuel costs and merger savings.
Analysts expected revenue of $7 billion.
Airlines have cut jobs and reduced capacity in the past two years as the economic downturn battered demand for air travel. In recent months, U.S. carriers have noted that business demand is picking up.
"Management is focused on reducing debt and building a stronger financial foundation so as to better manage the inherent cyclicality of the industry (including Mother Nature's ash)," said JPMorgan analyst Jamie Baker in a research note.
At Delta, passenger revenue rose 4 percent in the first quarter while unit revenue climbed 8 percent from the year earlier, helped by fuller planes.
"We are encouraged by the improvements we continue to see in the revenue environment," Delta Chief Executive Richard Anderson said in a statement. "We expect the positive revenue trends to continue and to be solidly profitable in the June quarter."
Delta became the world's biggest air carrier when it bought Northwest in 2008. It could lose its top ranking should two of its U.S. rivals merge.
Currently, UAL Corp's
"DAL will clearly benefit from any further industry consolidation," Baker said.
Baker added that if a merger comes to pass, Delta will face increased competition down the road, but would benefit in the "short to medium term" from capacity adjustments.
(Reporting by Karen Jacobs, editing by Dave Zimmerman)
