Delta Air Lines (DAL) - Get Report on Wednesday announced a steep quarterly loss as the coronavirus pandemic and the damage it has done to global travel cost the carrier millions, though it did note it has enough cash on hand to continue operations for the time being.
The Atlanta-based airline posted a quarterly loss of $534 million. Its adjusted loss in the period of 51 cents a share, compared with year-earlier earnings of 96 cents. Revenue was $8.6 billion, down 18% from a year ago and below analysts’ estimates of $9.3 billion.
The airline said it had $6 billion in cash on hand at the end of the quarter, though had burned cash at a daily rate of $100 million per day. It is looking to get that figure down by half by end of June while beefing up liquidity, it said.
“With the significant impact of Covid-19 on Delta’s revenue, we were burning $100 million per day at the end of March," Delta CFO Paul Jacobson said. "Through our decisive actions, we expect that cash burn to moderate to approximately $50 million per day by the end of the June quarter.
“The decade of work we put into the balance sheet to lower debt and build unencumbered assets has been critical to our success in raising capital and we expect to end the June quarter with approximately $10 billion in liquidity,” Jacobson added.
“These are truly unprecedented times for all of us, including the airline industry," Delta CEO Ed Bastian said. "Government travel restrictions and stay-at-home orders have been effective in slowing the spread of the virus, but have also severely impacted near-term demand for air travel, reducing our expected June quarter revenues by 90%."
Before the pandemic pushed the global airline industry into a tailspin, Delta was one of the few airlines holding its own amid the fallout from the grounding of Boeing’s (BA) - Get Report 737 MAX jets, which had forced other carriers to cancel flights and switch to other types of airplanes to make up for not being able to use them.
Since that time, however, all airlines including Delta have suffered unprecedented losses as the global Covid-19 pandemic forced the cancellation of thousands of flights and has brought all but essential travel to a near-standstill.
Shares of U.S. airlines including Delta leveled off last week after the industry reached a tentative agreement with the U.S. government to cover payroll expenses through September in a $25 billion bailout deal.
Alaska Airlines (ALK) - Get Report, Allegiant Air (ALGT) - Get Report, American Airlines (AAL) - Get Report, Delta Air Lines, Frontier Airlines, Hawaiian Airlines (HA) - Get Report, JetBlue Airways (JBLU) - Get Report, United Airlines (UAL) - Get Report, SkyWest Airlines (SKYW) - Get Report, and Southwest Airlines (LUV) - Get Report have all indicated they are all planning to participate.
Shares of Delta Air Lines were up 1.52% at $23.40 in trading on Wednesday.