So if I called United’s $500 million loss yesterday dreadful, then I’m going to have to come up with a far more sinister word for Delta and Northwest’s more than $10 billion loss today, right? Well, not really.

Losing $10 billion is just silly. Though it’ll make great headlines, and you’ll see it splashed all over the various news sites, it means just about nothing. Both airlines were in bankruptcy, and when they came out last year they used fresh start accounting. That means you throw all the old numbers away and create brand new ones. It’s as if the company had just started operating. So, each airline has to set fair market value of each asset and that helps build the value of the company.

Now that Delta and Northwest are merging, there is a financial transaction taking place between the two. Because of that, it’s effectively setting a current value on each airline, and guess what? That value is WAY below what they thought it was last year. Yeah, fuel may very well be the culprit here, but it just doesn’t matter. They have to write down their value on their books, but that’s all it means. So, you can ignore the headlines.

The numbers that matter? Excluding special items, Delta lost $274 million for the quarter and Northwest lost $191 million. Now we’re back into the realm of normalcy. The only problem here is that year over year comparisons aren’t very good. Both airlines were still bankrupt last year, so it won’t tell us much. But we can try to look at analyst expectations.

Delta lost 69 cents per share while expectations were for a loss of 51 cents. At Northwest, the airline lost 78 cents per share with analyst expectations at 34 cents. My understanding, however, is that those analyst numbers for Northwest are somewhat like comparing apples and oranges because the analyst expectations included some things that the Northwest numbers did not. So, Northwest came out about as expected.

No, these aren’t good numbers, but they aren’t the terrible numbers that the mass media would have you believe either.