Company sees its first quarterly loss since 2014
After reporting quarterly profits for more than five years and annual profits for more than a decade, Delta Air Lines’ balance sheet has nosedived into the red. The company has reported a $534 million loss for the first quarter of 2020. That’s Delta’s first loss since the final quarter of 2014, and with passenger numbers down more than 90%, the next quarter is likely to be far worse, reports CNN;
Delta is among the first airlines to report on its coronavirus-related loss. Delta, which had previously been doing so well that it paid a record $1.6 billion to employees in profit-sharing for 2019, says it was burning through $100 million in cash a day in late March but hopes to get that down to $50 million a day by June. Some 650 of its aircraft have been parked.
At least 37,000 of 90,000 Delta employees have agreed to take unpaid leave during the pandemic, the company says. Other airlines have been hit just as hard, but Delta’s shares actually rose 2.2% after it reported the loss, the Wall Street Journal reports.
The company says it has raised $5.4 billion with measures including loans and a deal to sell some planes and lease them back. It has also received $2.7 billion of an eventual $5.4 billion from the Treasury. Delta Chief Executive Ed Bastian says the recovery could take up to three years. “We do know that Delta will be a smaller airline for some time, and we should be prepared for a choppy, sluggish recovery even after the virus is contained,” he told employees. “I hope it’s sooner, but we need to be realistic in our planning.”