| | | Delta Air Lines Sees 'Staggering' COVID-19 Impact in Second Quarter With CEO Cautious on Recovery
MT NEWSWIRES 11:27 AM ET 7/14/2020
Symbol Last Price Change | DAL | 25.7248 | -1.0952 (-4.08%) | | QUOTES AS OF 11:27:34 AM ET 07/14/2020 |
11:27 AM EDT, 07/14/2020 (MT Newswires) -- Delta Air Lines(DAL) is seeing the "staggering impact" of the COVID-19 pandemic on its operations, swinging to a sharp loss in the second quarter even as revenue still managed to top analysts' expectations as the chief executive said there's caution about the pace of the recovery this year.
The Atlanta-based carrier reported an adjusted loss of $4.43 a share from earnings of $2.35 a share a year earlier, while the consensus on Capital IQ was for a loss of $4.16. Operating revenue plunged 88% to $1.47 billion, ahead of the Street's view for $1.39 billion.
Passenger revenue cratered 94% to $678 million as travel demand retreated sharply as the disease caused by the coronavirus that emerged from China late last year spread around the world. Delta's handed out more than $2.2 billion in cash refunds to travelers.
"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 Chief Executive Ed Bastian. "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."
Adjusted operating expenses in the June quarter dropped 53% year-on-year to $4.8 billion as the company's fuel costs and maintenance expenses plunged with planes parked. Salaries and related costs fell 24% to $2.09 billion as more than 45,000 workers took unpaid leaves.
On a conference call with analysts, Bastian said they see seats available for sale at 20% to 25% of last year's level in the current quarter that ends in September, which would be up 10% from the just-ended period.
"Business travel, which typically provides 50% of our revenue, has not yet returned in any meaningful way, with corporate offices slow to reopen, quarantine restrictions in markets like New York and Chicago, and states in the Sunbelt reversing or pausing reopening plans," he said, according to a transcript of the call. "We remain cautious on the pace of recovery through the balance of the year."
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