Delta Air Lines reported second-quarter 2020 financial results on Tuesday, revealing a “staggering” GAAP pre-tax loss of $7 billion and loss per share of $9.01 on total revenue of $1.5 billion.
The dismal performance is hardly surprising, however, given the ongoing impact of the coronavirus pandemic, which has prompted numerous travel restrictions and a plunge in demand that’s devastated the airline industry in recent months.
The carrier’s adjusted pre-tax loss of $3.9 billion excludes $3.2 billion of items directly related to the impact of the COVID-19 crisis such as fleet-related restructuring charges, write-downs related to Delta’s equity investments and grant funds from the CARES Act.
“A $3.9 billion adjusted pre-tax loss for the June quarter on a more than $11 billion decline in revenue over last year, illustrates the truly staggering impact of the COVID-19 pandemic on our business. In the face of this challenge, our people have acted quickly and decisively to protect our customers and our company, reducing our average daily cash burn by more than 70 percent since late March to $27 million in the month of June,” Delta CEO Ed Bastian said in a statement.
Delta reported total adjusted revenue for the quarter of $1.2 billion, a whopping 91 percent decline compared to the prior year.
“Given the combined effects of the pandemic and associated financial impact on the global economy, we continue to believe that it will be more than two years before we see a sustainable recovery,” added Bastian. “In this difficult environment, the strengths that are core to Delta’s business—our people, our brand, our network and our operational reliability—guide every decision we make, differentiating Delta with our customers and positioning us to succeed when demand returns.”
Delta has raised nearly $15 billion in financing transactions since early March, concluding the most recent quarter with $15.7 billion in liquidity.
Looking ahead, Delta is aiming to become a smaller, more efficient airline and plans to accelerate fleet simplification with the retirement of its entire MD-88, MD-90, 777 and 737-700 fleets and portions of the 767-300ER and A320 fleets in 2020. The airline is also looking to take advantage of reduced demand to speed up progress on airport construction projects in places like Los Angeles, New York and Salt Lake City.
In the meantime, Delta continues to prioritize safety by utilizing enhanced cleaning procedures, blocking middle seats and capping load factor at 60 percent while requiring masks for all employees and passengers.
