- Delta Air Lines announced a net loss of $5.7 billion for the second quarter due to the coronavirus pandemic.
- Delta also rolled back plans to add flights as travel demand has begun to fall again following a modest recovery.
- More than 17,000 employees have taken buyouts, but CEO Ed Bastian said layoffs are still likely.
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Delta reported a net loss of $5.7 billion for the second quarter as the coronavirus decimates the airline industry (DAL)
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Delta Air Lines announced a net loss of more than $5.7 billion in the second quarter its biggest loss since the 2008 financial crisis, according to CNBC .
The loss came as Delta collected just $1.47 billion in operating revenue, an 88% falloff from the same quarter in 2019. The airline lost $4.43 on an adjusted per-share basis.
The loss came as the airline industry has been among the hardest hit by the coronavirus pandemic. Delta said that demand for travel was down 93% from 2019 levels for the quarter, as measured by the number of passengers carried. Passenger revenues fell 94%, while non-ticket revenue including from cargo and the airline's loyalty program fell 65%.
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"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," CEO Ed Bastian said in a statement.
Delta also wrote down more than $2 billion on investments in foreign airlines, including LATAM, AeroMexico, and Virgin Atlantic.
On a more positive note, the airline said it had managed to reduce its daily cash burn to about $27 million by the end of June, down from $100 million in March. It averaged a $43 million daily cash burn for the quarter.
Delta said it had raised $15 billion in liquidity since early March at a blended interest rate of 5.5%. The airline ended the quarter with $15.7 in liquidity.
Delta and other US airlines have significantly reduced capacity and grounded large portions of their fleets due to the collapse of air travel demand. Delta also retired several aircraft types from its fleet, including its entire MD-90, Boeing 777, and Boeing 737-700 fleets, as well as portions of its Boeing 767-300ER and Airbus A320 fleets.
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The airline received $5.4 billion in payroll support through the federal CARES Act. In exchange, the airline agreed not to furlough or lay off staff until October 1. Delta and other airlines have urged employees to take early retirements, voluntary leaves, or buyouts ahead of expected furloughs.
Delta also has access to another $4.6 billion in general loans through the CARES Act, but has not drawn on them yet.
Bastian said that 17,000 employees had taken voluntary buyouts, but said on CNBC that layoffs remained possible.
"I'm optimistic if we do have a furlough, it's going to be relatively small numbers," he said.
The airline will hold an analyst call at 10 a.m. ET.
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