Delta Air Lines reported a continued revenue loss for the second quarter due to the lingering impact of the coronavirus on travel — noting that a “sustainable” recovery for the airline industry could take more than two years.

Delta Air Lines CEO Ed Bastian reported that the Atlanta-based airline recorded an adjusted pre-tax loss of US$3.9 billion in the second quarter of 2020 and more than US$11 billion in revenue decline compared to 2019, illustrating the “truly staggering impact of the COVID-19 pandemic on our business”.

70% less cash burn; US$15.7B liquidity

He noted that despite this challenge, Delta acted quickly to protect the company by moving to reduce its average daily cash burn by more than 70% since late March. 

Bastian said as of June, daily cash burn amounts to US$27 million and the company has US$15.7 billion in liquidity.

“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,” he added.

The US carrier said it will work to utilise its people, brand, network and operational reliability to position it for success “when demand returns”.

Smaller, more efficient airline

Some of the measures taken by Delta to position it for recovery following the pandemic include:

• Retiring its MD-88, MD-90, Boeing 777 and 737-700 fleets, and partial retirement of 767-300ER and A320 fleets in 2020;
• Accelerating airport construction projects in Los Angeles, New York LaGuardia and Salt Lake City, in an effort to lower total costs and shorten timelines;
• Launching voluntary separation and early retirement programmes; 
• Obtained US$5.4 billion in grant funds and unsecured loans through the PSP programme, to be paid in instalments until July 2020;
• Extended maturities of US$1.3 billion in borrowings under revolving credit facilities from 2021 to 2022;
• Amended credit facilities to replace all fixed charge coverage ratio covenants with liquidity based covenants.

Bastian noted that Delta will be positioned to be a  “smaller, more efficient airline” over the next several years by accelerating fleet simplification.