Delta Air CEO Cautious About Schedule, Sees Slow Rebound

Delta CEO Ed Bastian predicted, in a memo to workers, a “lengthy and slow” rebound from the coronavirus pandemic.
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Don’t expect Delta Air Lines  (DAL) - Get Report to expand its flight schedule anytime soon.

The coronavirus spike in much of the country has brought “renewed caution” about its schedule, Delta Chief Executive Ed Bastian said in a memo to workers cited by Bloomberg. 

He predicted a “lengthy and slow” rebound from the coronavirus pandemic.

Delta Air shares at last check were 6.2% lower at $25.35. The stock has dropped 56% year to date.

The airline is restoring about 1,000 flights this month, but that puts it at just 30% of its normal July schedule, he said. 

Over the July 4 weekend, Delta flew only one-fifth as many passengers as it did a year earlier.

In the letter, Bastian reminded Delta employees that they would do well to take an early retirement or voluntary departure before layoffs hit. The deadline for workers to accept Delta’s offer is July 13.

Delta and four other airlines reached agreements with the Treasury Department this week on terms for billions of dollars in federal loans to withstand the pandemic.

Delta said in April that it’s eligible for a $4.6 billion loan.

Morningstar analyst Brian Bernard offered a mixed outlook for Delta after its first-quarter earnings release in April.

“While it's difficult to say with any certainty when air traffic will return, we are confident that demand will eventually bounce back,” he wrote in a commentary.

“We think the primary risk to airline investors" is "increased leverage and equity dilution. … We think the best-positioned airlines are firms like Delta, which came into this crisis with relatively little debt and an efficient cost base.”