For banks, the coronavirus-era numbers to look for are loan losses. For airlines, it is the cash-burn rate.
For Delta Air Lines (DAL) - Get Report, that cash burn rate added up to $100 million a day - yes, a day - in the first three months of 2020 as the airline struggled with the unprecedented fallout in travel related to the coronavirus pandemic.
The Atlanta-based airline posted an adjusted quarterly loss of 51 cents 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 numbers only reflect a portion of airlines' losses as the pandemic only began to truly impact travel in March, when the crisis washed ashore in North America and states began imposing shelter-in-place orders for millions of Americans.
Delta 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."
Delta's earnings report was the first from a major carrier following the U.S. government's pledge to commit $25 billion in rescue funds to help keep airlines aloft through the pandemic.