GEORGIA, United States – HEAVY winter storms and one-time merger-related expenses and severance charges hurt Delta Air Lines Inc’s results as the world’s largest carrier reported yesterday that it lost US$256 million in the first quarter.

The red ink was still far less than a year earlier, thanks to rising demand for air travel, and the company predicts a solid profit for the current quarter even in the face of the severe travel disruptions currently hitting Europe due to a volcanic ash cloud hovering over the region.

Delta’s shares rose 11 cents to US$13.29 in morning trading.

Other major airlines set to report results this week include American Airlines parent AMR Corp, Continental Airlines Inc, Southwest Airlines Co and AirTran Airways parent AirTran Holdings Inc. US Airways Group Inc and United Airlines parent UAL Corp are scheduled to report first-quarter results next week.

Across the industry, fares are higher, demand is up and the airlines have established a steady revenue stream from add-on fees for such things as baggage, pillows and food.

Winter storms restricted service for many major carriers in the January-March period. Delta lost US$65 million in revenue because of repeated storms in February, which forced it to cancel roughly 7,000 flights.

Fuel prices also are substantially higher than a year ago, although Delta’s fuel hedging program helped it mitigate their impact in the first quarter.

Now, as airlines head into their busy summer travel season, many are hoping to start turning profits again. If Delta posts a profit for the April-June period, it will be its first-quarterly profit since the third quarter of 2007.

Delta’s first-quarter loss was equivalent to 31 cents a share, compared to a loss of US$794 million, or 96 cents a share, a year earlier.

Excluding special items, Delta, based in Atlanta, lost 23 cents a share.

Revenue rose two per cent to US$6.85 billion from US$6.68 billion.

Analysts, who generally exclude one-time items, were expecting a loss of 23 cents a share on revenue of US$7.01 billion.

Passenger unit revenue increased eight per cent in the quarter.

In the quarter, Delta recorded special items totalling US$64 million, including US$46 million in merger-related expenses and US$8 million in severance charges. Delta acquired Northwest Airlines in October 2008 and has been integrating the two carriers since then. It now operates under a single operating certificate.

As of March 31, Delta had US$5.6 billion in unrestricted liquidity. Delta expects to increase that total to US$6 billion by the end of June.

In the second quarter, which started April 1, Delta projects system capacity will be flat to up one per cent.