Delta Air Lines (DAL) - Get Report shares rose Thursday, after Chief Executive Ed Bastian said the carrier was “still on track to reach the break-even point in the spring,” despite the coronavirus pandemic.
He offered that remark in a memo to employees that was published in a Securities and Exchange Commission filing. And the memo wasn't all optimism.
“We’ve always said this was going to be a choppy recovery, and that’s been true in recent weeks,” Bastian said. “Like others in the industry, we’ve seen some slowing of demand and forward bookings as covid cases have risen across the U.S.”
The Atlanta carrier's shares recently traded at $42.46, up 3.4%. The stock has fallen 27% year to date as the pandemic kept people at home and slashed travel.
“Revenues are slowly coming back, but we still expect to be at just 30% of our 2019 levels for the fourth quarter,” Bastian said.
“That slowdown has pressured our daily cash burn by about $2 million per day and we’re now expecting to end up around $12 million to $14 million per day for the quarter.”
To be sure, that represents “solid improvement from the $24 million daily burn rate in the third quarter,” he said.
“While the environment continues to be volatile, I’m encouraged that we are still on track to reach the break-even point in the spring, and that outlook has been bolstered by continued positive developments with vaccines.”
Of course, “it will take months for a vaccine to be broadly distributed,” Bastian said. But “it’s a clear sign of light at the end of the tunnel.
"Widespread vaccinations among our customers and our employees will be essential to Delta’s sustained recovery and the start of our rebound.”