Delta Air Lines reported a massive loss of $5.4 billion for the quarter that ended September 30. These losses show how majorly the pandemic is affecting the airline industry.
However, Delta is the first of the largest airlines to report losses for the quarter. Moreover, it says that it plans to take effective steps to cut its losses and conserve its remaining cash. The airline will retire 400 aircraft and delay taking new planes.
Though these are huge losses. But still, the company says that it has $21.6 billion in reserve to try to get it through the crisis.
“While our September quarter results demonstrate the magnitude of the pandemic on our business. We have been encouraged as more customers travel. And we are seeing a path of progressive improvement in our revenues, financial results and daily cash burn,” said CEO Ed Bastian in a statement.
In addition, he said, that “the actions we are taking now to take care of our people, simplify our fleet. Improve the customer experience, and strengthen our brand will allow Delta to accelerate into a post-COVID recovery.”
Decline in Operations
The loss served as a counterpoint to the $1.5 billion profit that the airline earned in the same quarter a year ago before the pandemic hit. The quarter is usually closely watched in the airline industry because it includes the busy summer vacation season.
Passenger revenues declined 83% during the quarter as the airline dramatically cut its flight schedule. It is offering 63% fewer seats than the same period last year. Delta’s cargo operations were down but by not as much, off 25%.
Delta’s president, Glen Hauenstein, predicted that recovery may take two more years until revenues return to normal.
“With a slow and steady build in demand, we are restoring flying to meet our customers’ needs, while staying nimble with our capacity in light of COVID-19,” Hauenstein said.
Delta announced in September it will delay the effective date for a potential 220 pilot furloughs to November 1. It will not furlough any flight attendants and front-line workers in 2020 due to the many employees who opted for early retirement.
The airline industry has lobbied for a $25 billion injection from Congress to extend the Payroll Support Program. The program allocated $25 billion in aid as part of the $2.2 trillion CARES Act passed in March.