Delta Air Lines on Tuesday posted another multibillion-dollar net loss after the coronavirus pandemic roiled what is usually the peak travel period of the year. The carrier warned it could take years to recover.
Kicking off third-quarter reporting for the beleaguered airline sector, Delta said its net loss was $5.4 billion in the third quarter, compared with a profit of $1.5 billion in the year-earlier period. It said revenue dropped 76% from $12.56 billion a year earlier to $3.06 billion in the three months ended Sept. 30, slightly under analysts' forecasts for $3.1 billion.
Delta's president warned revenues may not normalize for "two years or more."
Delta's shares were down 3.1% in premarket trading.
Large airlines like Delta have been particularly challenged in the pandemic because they previously relied heavily on business travel and sprawling international networks, two areas that have been hard-hit by the pandemic.
Delta has spent recent months retiring dozens of aircraft and reducing its footprint to cut costs. About 18,000 Delta employees, about a fifth of its pre-pandemic workforce, accepted buyouts and early retirement packages, prompting a $3.1 billion restructuring charge.
Airlines received portions of $25 billion in federal payroll support Congress passed this spring but talks between the Trump administration and Congress for additional airline aid have repeatedly derailed.
Here's how Delta performed compared with what Wall Street expected, based on average estimates compiled by Refinitiv:
- Adjusted EPS: a loss of $3.30 versus an expected loss of $3
- Revenue: $3.06 billion versus $3.11 billion, expected
More airlines are competing for price-sensitive leisure travelers within the United States but demand has struggled, despite an uptick from multidecade lows hit in April. The Transportation Security Administration screened nearly 64 million people at U.S. airports in the third quarter, up 150% from the three months ended June 30 but still down from the 221 million people TSA screened in the year-earlier period.
Delta and its competitors have scrambled to introduce enhanced cleaning procedures and other policies to calm travelers nervous about flying during the pandemic. Delta, for example, leaves middle seats open on flights.
Delta was able to cut its daily cash burn by more than 44% from roughly $43 million during the second quarter to an average of $24 million a day. Delta got down to $18 million a day in September, an improvement but still far off its goal of breaking even by the end of the year.
"While our September quarter results demonstrate the magnitude of the pandemic on our business, we have been encouraged as more customers travel and we are seeing a path of progressive improvement in our revenues, financial results and daily cash burn," CEO Ed Bastian said in an earnings release.
Since the pandemic began, Delta has posted more than $11 billion in losses.
On an adjusted basis, Delta lost $3.30 per share, more than the $3 per share loss analysts polled by Refinitiv were expecting.
Delta has already retired dozens of planes to cut costs. In the last quarter, it added to the list, deciding to retire its Boeing 767-300 ERs and 717-200s by 2025 and CRJ-200s by 2023.
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October 13, 2020 at 07:30PM
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Delta posts $5.4 billion loss in another brutal quarter, warns recovery could take 2 years or more - CNBC
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