| | | Update: Delta Air Lines System Capacity Seen 60% Lower in Q3; Plans With Cayman Islands Subsidiary Senior Notes Offering Plus Term Loan Facility Totaling $6.5 Billion
MT NEWSWIRES 2:12 PM ET 9/14/2020
Symbol Last Price Change | DAL | 32.5849 | +0.8849 (+2.79%) | | AXP | 106.795 | +3.435 (+3.32%) | | QUOTES AS OF 02:12:36 PM ET 09/14/2020 |
02:12 PM EDT, 09/14/2020 (MT Newswires) -- (Updates with system capacity utilization expectations for the third quarter.)
Delta Air Lines (DAL) said Monday system capacity is expected to be down about 60% during the September quarter, with
international capacity lower by roughly 80% and domestic capacity declining by approximately 50%.
As a result of reduced demand expectations and lower capacity in the quarter and beyond, Delta has parked about 40% of its mainline fleet, according to a Form 8-K filing.
While loyalty travel award revenue fell 59% during the six months to June 30, cash from sales to American Express(AXP) declined by less than 5% year-over-year to $1.9 billion as SkyMiles members continue to use co-brand cards.
Delta also said the $5.4 billion it had received under the CARES Act has been paid in installments through July 2020.
Separately, Delta, along with its new indirect wholly owned subsidiary SkyMiles IP, said earlier it plans a private offering of senior secured notes as well as a senior secured term loan facility concurrently with the closing of the offering for an aggregate $6.5 billion.
Delta and SkyMiles IP will be co-issuers of the notes -- which can be issued in one or more tranches -- and co-borrowers under the new credit facility, according to a statement. The offering is not contingent upon the closing of the loan facility.
SkyMiles intends to lend the net proceeds to Delta after depositing a portion of it in a reserve account. Delta expects to use the proceeds for "general corporate purposes and to bolster its liquidity position."
Shares rose almost 3% intraday.
Price: 32.57, Change: +0.87, Percent Change: +2.75 |
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