Delta Air Lines passenger planes are parked due to flight reductions made to slow the spread of coronavirus disease (COVID-19) at Birmingham-Shuttlesworth International Airport in Birmingham, Alabama, USA.
Elijah Nouvelage | Reuters
Delta Air Lines posted another multi-billion dollar net loss on Tuesday after the coronavirus pandemic sparked what is usually the highest travel time of the year. The carrier warned that it could take years for him to recover.
At the start of its third quarter reporting for the beleaguered aviation sector, Delta said its net loss for the third quarter was $ 5.4 billion, compared to a profit of $ 1.5 billion for the same period last year. Revenue declined 76% from $ 12.56 billion last year to $ 3.06 billion for the three months ended September 30, slightly below analysts' forecast of $ 3.1 billion.
Delta's president warned that revenues could not normalize for "two years or more".
Delta's shares fell 3.1% in premarket trading.
Large airlines like Delta have been particularly hard hit by the pandemic as they previously relied heavily on business travel and extensive international networks, two areas that have been hard hit by the pandemic.
Delta has retired dozens of aircraft in the past few months and reduced its footprint to keep costs down. Approximately 18,000 Delta employees, roughly a fifth of those employed prior to the pandemic, accepted acquisitions and early retirement packages, resulting in a $ 3.1 billion restructuring fee.
The airlines received portions of $ 25 billion in federal payroll support. Congress passed this spring, but talks between the Trump administration and Congress about additional aid to airlines have repeatedly derailed.
Here's how Delta performed compared to Wall Street's expectations, based on Refinitiv's average estimates:
Adjusted earnings per share: a loss of $ 3.30 versus an expected loss of $ 3 Revenue: $ 3.06 billion versus $ 3.11 billion expected
More airlines are competing for budget-conscious vacationers in the US, but demand has struggled across multiple box offices despite a surge from April lows. The Transportation Security Administration screened nearly 64 million people at U.S. airports in the third quarter, up 150% from the three months ended June 30, but still fewer than the 221 million people TSA screened for the same period last year.
Delta and its competitors have made efforts to put in place improved cleaning procedures and other guidelines to reassure travelers who are nervous about flying during the pandemic. Delta, for example, leaves the middle seats open on flights.
Delta reduced its daily cash burn by more than 44% from around $ 43 million in the second quarter to an average of $ 24 million per day. Delta fell to $ 18 million a day in September, an improvement, but still far from its goal of breaking even by the end of the year.
"While our results for the September quarter demonstrate the magnitude of the pandemic in our business, we have been encouraged as more customers travel and we see a path of incremental improvement in our sales, financial results and daily cash consumption," said CEO Ed Bastian into a profit release.
Delta has posted losses of more than $ 11 billion since the pandemic began.
Adjusted, Delta lost $ 3.30 per share, more than the loss analysts surveyed by Refinitiv expected $ 3 per share.
Delta has already retired dozens of aircraft to save costs. Last quarter, the list was expanded and a decision was made to retire the Boeing 767-300 ER and 717-200 by 2025 and the CRJ-200 by 2023.