Delta projects gloomy two years ahead as losses soar
Delta Air Lines has reported an adjusted pre-tax loss of $3.9 billion for the three months to the end of June.
The figure excludes $3.2 billion of items directly related to the impact of Covid-19.
These including fleet-related restructuring charges, write-downs related to equity investments, and the benefit of the CARES Act grant recognised in the quarter.
The carrier reported total adjusted revenue of $1.2 billion for the quarter, which excludes refinery sales.
This is a decline of 91 per cent versus last year, on a system capacity reduction of 85 per cent compared to 2019.
“A $3.9 billion adjusted pre-tax loss for the June quarter on a more than $11 billion decline in revenue over last year, illustrates the truly staggering impact of the Covid-19 pandemic on our business.
“In the face of this challenge, our people have acted quickly and decisively to protect our customers and our company, reducing our average daily cash burn by more than 70 per cent since late March to $27 million in the month of June,” said Ed Bastian, Delta chief executive.
At the end of the June quarter, Delta said it had $15.7 billion in liquidity.
“Given the combined effects of the pandemic and associated financial impact on the global economy, we continue to believe that it will be more than two years before we see a sustainable recovery,” added Bastian.
“In this difficult environment, the strengths that are core to Delta’s business – our people, our brand, our network and our operational reliability – guide every decision we make, differentiating Delta with our customers and positioning us to succeed when demand returns.”
Delta said it would look to shrink in size, with the retirement of entire MD-88, MD-90, Boeing 777 and Boeing 737-700 fleets this year.
Portions of the Boeing 767-300ER and Airbus A320 fleets would also go, the carrier added.
Taking advantage of reduced demand, Delta added it had been able to to accelerate airport construction projects in Los Angeles, New-York LaGuardia and Salt Lake City in an effort to shorten timelines and lower the total cost for the projects.