As the airline industry continues to struggle amid the ongoing coronavirus pandemic, Delta Air Lines on Tuesday posted a $5.4 billion loss in the third quarter after spending billions on buyouts for employees and restructuring its fleet.
Bid number
$6.5 billion. That’s how much Delta said it would borrow in a new debt deal last month, backed by its SkyMiles frequent-flyer program. The company said it would use the money to shore up liquidity during the pandemic.
Crucial quote
“While it may be two years or more until we see a normalized revenue environment,” Delta President Glen Hauenstein said in a statement, “by restoring customer confidence in travel and building customer loyalty now, we are creating the foundation for sustainable future revenue growth.”
Key background
Lawmakers in Washington have been struggling for weeks to reach an agreement on the next round of federal coronavirus aid legislation. In March, the $2.2 trillion CARES Act included a $25 billion bailout plan for the beleaguered airline industry, which has seen passenger demand plummet as the coronavirus crisis keeps travelers at home.
Last week, American Airlines CEO Doug Parker warned of further service cuts if Congress is unable to deliver more federal aid.
American has already cut routes to more than a dozen cities during the pandemic, and it furloughed 19,000 employees when the aid program under the CARES Act expired at the beginning of October. United has also furloughed 13,000 employees.
Key facts
- Delta’s third-quarter revenue was $3 billion, down from $12.5 billion in the same period last year.
- The carrier said its losses related to the coronavirus pandemic—including those buyouts and fleet changes—totaled $4 billion.
- Delta said its daily cash burn in September averaged $18 million per day.
- Shares of Delta fell 1% in premarket trading Tuesday morning, and the stock is down more than 46% for the year.
