Delta Air Lines passenger jets are seen parked due to flight cuts aimed at slowing the spread of coronavirus disease (COVID-19), at Birmingham-Shuttlesworth International Airport in Birmingham, Alabama, USA
Elijah Nouvelage | Reuters
Delta Airlines Tuesday, posted another multi-billion dollar net loss after the coronavirus pandemic disrupted what is typically the peak time of the year. The carrier has warned that recovery could take years.
Launching the third quarter report for the besieged airline industry, Delta said its net loss was $ 5.4 billion in the third quarter, compared to a profit of $ 1.5 billion the previous year. He said revenue fell 76%, from $ 12.56 billion a year earlier to $ 3.06 billion in the three months ended September 30, slightly below analysts’ forecast of 3 , $ 1 billion.
Delta’s chairman warned that revenues may not normalize for “two or more years.”
Delta shares fell 3.1% in pre-market trading.
Major airlines like Delta have been particularly affected by the pandemic because they previously relied heavily on business travel and sprawling international networks, two areas that have been hit hard by the pandemic.
Delta has spent the past few months removing dozens of planes and reducing its footprint to cut costs. About 18,000 Delta employees, or roughly one-fifth of its pre-pandemic workforce, have accepted buyouts and early retirement programs, generating $ 3.1 billion restructuring costs.
Airlines received $ 25 billion in federal payroll support that Congress passed this spring, but talks between the Trump administration and Congress for additional air assistance have repeatedly derailed.
Here is how Delta performed against what Wall Street expected, based on the average estimates compiled by Refinitiv:
- Adjusted EPS: a loss of $ 3.30 versus an expected loss of $ 3
- Revenue: $ 3.06 billion vs. $ 3.11 billion expected
More airlines are competing for price-sensitive leisure travelers to the United States, but demand has struggled, despite rising from multi-decade lows reached 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 screened by the TSA the previous year.
Delta and its competitors have been working to introduce improved cleaning procedures and other policies to calm travelers nervous about flying during the pandemic. Delta, for example, leaves the middle seats open on flights.
Delta was able to reduce its daily cash consumption by more than 44%, from about $ 43 million in the second quarter to an average of $ 24 million per day. Delta fell to $ 18 million a day in September, an improvement but still a long way from its profitability target by year-end.
“Although our September quarter results demonstrate the extent of the pandemic on our business, we have been encouraged as more customers travel and we see a path of gradual improvement in our revenues, our results. financial and our daily consumption of cash, ”CEO Ed Bastian said in a earnings release.
Since the start of the pandemic, Delta has recorded more than $ 11 billion in losses.
On an adjusted basis, Delta lost $ 3.30 per share, more than the $ 3 per share analysts polled by Refinitiv were expecting.
Delta has already withdrawn dozens of planes to cut costs. In the last quarter, it added to the list, deciding to retire its Boeing 767-300 ER and 717-200 by 2025 and CRJ-200 by 2023.