Delta Air Lines reported a $5.7 billion net loss in the second quarter, citing plummeting demand due to the COVID-19 crisis. It was Delta’s largest loss since early 2008.
The company said demand was less than 30% of pre-pandemic levels. It has also reduced the number of flights it planned to add in August from 1,000 per day down to 500.
“Demand has stalled as the virus has grown, particularly down here in the South, across the Sun Belt, coupled with the quarantine measures that are going in place in many of the Northern states,” Ed Bastian, Delta’s chief executive officer, said in an interview with CNBC. “Those two factors are causing consumers to pause.”
Delta reported total adjusted revenue of $1.2 billion, a drop of more than 90% year over year. The company has raised nearly $15 billion since early March at blended average interest rate of 5.5%.
The airline was burning through cash at a rate of $27 million per day by the end of June, down from about $100 million a day at the end of March. It cut total operating expenses by $5.5 billion during the quarter.
“A $3.9 billion adjusted pre-tax loss for the June quarter on a more than $11 billion decline in revenue over last year, illustrates the truly staggering impact of the COVID-19 pandemic on our business,” said Ed Bastian, Delta’s chief executive officer. “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.”
The company said it had liquidity of $15.7 billion at the end of the second quarter and has not decided whether to borrow an additional $4.6 billion through the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
It already received $5.4 billion in loans and grants from the Treasury Department through the CARES Act to cover payroll through September.
“That’s when the restrictions around furloughs will come off and my goal, at Delta, is to avoid furloughs in any way we possibly can,” Bastian said.
The Transportation Safety Authority said the volume of traffic through U.S. airports grew 8% last week, down from 12% growth two weeks earlier. Overall, traffic is down 73% year-over-year.