Delta Air Lines reported a loss of $534 million for the first quarter, the carrier's first quarterly loss since 2012.
In the first major airline earnings report after the onset of the coronavirus pandemic, Delta reported an 18 percent year-over-year drop in passenger revenues to $7.6 billion for the quarter, which included the two months before the travel shutdowns began to accelerate. Traffic was down 16.6 percent year over year as capacity declined 5.7 percent, and load factor dropped 9.6 percentage points to 73.1 percent.
CEO Ed Bastian said the second quarter will be worse, with total revenues for the period expected to be down by $11 billion, about 90 percent, year over year. The carrier is cutting expenses in half for the quarter, including parking more than 650 aircraft, reducing work schedules as well as executive pay and continuing to offer voluntary leave options, which 37,000 employees have done so far. Even with mitigation measures, Delta will burn through about $50 million per day until the end of the second quarter, CFO Paul Jacobson said. However, Delta expects to have $10 billion in liquidity at the end of the second quarter, with help from the U.S. federal Coronavirus Aid, Relief and Economic Security Act as well as the capital Delta has been able to raise, he said.
Even as recovery begins, "we will need to resize our business in the near term to protect it in the long term," Bastian said. "The path to recovery is uncertain, and it will likely be choppy."
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