The American airline Delta Air Lines reported a quarterly loss for the first time in more than five years due to the negative consequences of the coronavirus pandemic for the tourism industry.
According to the airline’s press release, the net loss in January-March was $ 534 million, or $ 0.84 per share, compared with $ 730 million in profit, or $ 1.09 per share, in the first quarter of 2019.
The loss excluding one-time factors was $ 0.51 per share, compared with a profit of $ 0.96 per share a year earlier.
Revenue fell by 18%, to $ 8.59 billion from $ 10.47 billion, with an average forecast of analysts of $ 9.2 billion.
CEO Bastian said revenue in the second quarter is likely to fall 90% from the same period in 2019 and predicts a long-term recovery, telling employees that the airline will be less in the future.
“We don’t know when this will happen, but we know that Delta will become a small airline for some time, and we must be prepared for a fickle, sluggish recovery even after the virus is localized,” Bastian wrote. “I believe that the recovery period may take two to three years. I hope this takes less time, but we must be realistic in our planning. ”
The workload of flights in the first quarter decreased to 73.1% from 82.7% a year earlier. Analysts had expected an average of 79.1%.
Delta intends to slow down the pace of spending money from $ 100 million a day at the end of March to $ 50 million a day by the end of June. The airline expects liquidity to reach $ 10 billion by the end of the second quarter, compared to $ 6 billion currently. Delta Chief Financial Officer Paul Jacobson agreed to reschedule his planned retirement to help the company in times of crisis.
Air travel almost completely stopped since numerous countries of the world imposed travel restrictions and closed their borders. US passenger traffic crashed 95%, and airlines expect coronavirus concerns to put significant pressure on demand for flights soon.
The company has already received $ 2.7 billion of credit assistance under the “Law on Coronavirus Aid, Benefits and Economic Security” (CARES) and expects to receive the same amount (the total package is $ 5.4 billion) over the next three months.
“Due to the significant impact of COVID-19 on Delta’s revenues at the end of March, we were losing $ 100 million per day. Thanks to our decisive action, we expect this figure to drop to about $ 50 million per day by the end of the June quarter, ”said Paul Jacobson, Delta CFO. “The decade of work that we put into the balance sheet to reduce debt and create our assets was crucial for our success in raising capital, and we expect the quarter to have liquidity of about $ 10 billion by the end of June.”
Delta has been reporting annual profits for 10 consecutive years and has been waiting for continued strong demand in 2020. The company last recorded a quarterly loss in the fourth quarter of 2014.