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Delta reports hefty loss as COVID-19 clouds outlook

Agence France-Presse, Agence France-Presse
Delta reports hefty loss as COVID-19 clouds outlook

Planes belonging to Delta Air Lines sit idle at Kansas City International Airport in Kansas City, Missouri, on April 3, 2020. carriers reported an enormous drop in bookings amid the spread of the coronavirus and are waiting for a government bailout to fight the impact. Delta lost almost $2 billion in March and parked half of its fleet in order to save money. Jamie Squire/Getty Images/AFP

Delta Air Lines suffers a $5.4-billion loss in the 3rd quarter of 2020 following a 76% plunge in revenues to $3.1 billion

Despite aggressive cost-cutting moves, Delta Air Lines reported a hefty loss on Tuesday, October 13, and said the timing of a full industry recovery remained clouded by the coronavirus pandemic.

The big United States carrier has steadily worked to reduce its daily cash burn, but still suffered a $5.4-billion loss in the 3rd quarter following a 76% plunge in revenues to $3.1 billion.

Company officials said they had seen some positive booking momentum heading into the holiday season, but a real recovery depends on a comeback in business travel and the end of travel quarantines for COVID-19. 

Some industry officials say a full recovery could take two years or more.

“That will only come with widespread advances by the medical community and offices reopening, which many expect will start to happen in the 1st half of next year,” said chief executive Ed Bastian.

Bastian said he was confident that business travel would resume in the long-term, but perhaps at a 10% to 20% lower level due to Zoom and other technologies that allow for remote meetings.

He remained confident that gloomy forecasts will again be proven off-base since in the past “business travel has come back stronger than anyone anticipated,” he said.

The company is working with authorities to allow for more rapid coronavirus testing at airports with the goal of eliminating the need for travelers to quarantine upon entry, he said. 

Delta has avoided mass layoffs announced by competitors American and United Airlines, as voluntary retirements and furloughs have allowed it to lower daily cash burn to $18 million in September from $100 million in March.

But Delta has roughly 1,700 pilots more than it needs and will undertake furloughs in November if no deal is reached with the pilots union.

United Airlines last month reached an agreement with its union to avert furloughs, which involved cutting hours.

Delta shares fell 1.9% to $32.03 in afternoon trading. – Rappler.com

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