CHICAGO (Reuters) – Delta Air Lines said on Tuesday it did not plan to block daily bleeding due to the COVID-19 pandemic until next spring, despite having $ 1.3 billion in funding. federal assistance remaining for employee payrolls.
The airline had previously said it could halt a loss of cash that averaged $ 18 million per day in September before year-end, but pushed back the target, revenue of the third quarter falling 76% to $ 3.1 billion from a year earlier.
Atlanta-based Delta, the first U.S. airline to release third-quarter results, said it expects its cash consumption to decline to $ 10 million to $ 12 million per day in December. He was burning $ 27 million in cash a day in June.
The company fell to a net loss of $ 5.4 billion, or $ 8.47 per share, in the quarter from a profit of $ 1.5 billion a year ago. On an adjusted basis, the loss was $ 3.30 per share.
The shares were down 3.7% to $ 31.46 in pre-market trading.
The airline took a charge of $ 3.1 billion for voluntary departure and early retirement programs as Delta downsized due to declining demand, and a fleet restructuring charge of 2 , $ 2 billion.
However, a 32% drop in labor costs in the quarter led to $ 1.3 billion in unspent federal funds awarded by Congress in March to cover airline salary costs for six months. and protect jobs.
“We spent more money,” Delta CEO Ed Bastian told Reuters, saying the company could use that money in the fourth quarter, on top of any additional help if lawmakers finally approve another program. $ 25 billion payroll support for the United States. Airlines companies.
Industry push for more aid has broad bipartisan support, but is stuck amid a stalemate in Washington over broader economic relief from COVID-19.
Unlike its two main rivals, Delta has avoided leave for flight attendants and other frontline workers after cutting hours, but it could still lay off some 1,700 pilots on November 1 without a union deal or federal aid. extra, Bastian said.
Delta’s flight capacity fell 63% in the third quarter and its average load factor was only 41% compared to 88% a year ago, although the average efficiency per passenger fell only 2 %.
To woo suspicious passengers in the event of a pandemic, the airline is blocking seats from mid to end of the year. Policy beyond will depend on developments in COVID-19 testing, traveler surveys, and ongoing studies on the risk of COVID-19 transmission on airplanes. Studies so far have shown the risk to be “remarkably low,” Bastian said.
Delta has spent hundreds of millions of dollars in efforts to restore passenger confidence, and as more people begin to travel, quarantines and uneven public health measures remain a deterrent, Bastian said.
He estimates that business travel will recover in 12-24 months, but not 100%. Delta currently makes about 15% of its normal business travel, he said.
With no immediate need for new jets, the company has cut its Airbus and Bombardier aircraft purchase commitments by more than $ 2 billion this year and more than $ 5 billion through 2022.
Delta ended the quarter with $ 21.6 billion in cash, after a $ 9 billion fundraiser in September guaranteed by its loyalty program. Adjusted net debt stands at $ 17 billion.
Reporting by Tracy Rucinski; Editing by Leslie Adler and Steve Orlofsky