Delta Air Lines reported a $5.4 billion net loss for the third quarter after the coronavirus pandemic roiled what is usually the peak travel period of the year.
Delta’s revenue dropped by more than 75 percent from $12.56 billion a year ago to $3.06 billion in the three months ended Sept. 30, slightly under analysts’ forecasts for $3.1 billion, it said Tuesday, kicking off third-quarter reporting for the beleaguered sector. Delta’s president warned revenues may not normalize for “two years or more.”
Delta’s shares were down 2 percent in premarket trading.
The airline also posted a wider-than-expected loss during the quarter.
Large airlines like Delta have been particularly challenged in the pandemic because they previously relied heavily on business travel and sprawling international networks, two areas that have been hard-hit in recent months.
Delta has spent recent months retiring dozens of aircraft and reducing its footprint to cut costs. About 18,000 Delta employees, about a fifth of its pre-pandemic workforce, accepted buyouts and early retirement packages, prompting a $3.1 billion restructuring charge.
Airlines received portions of $25 billion in federal payroll support Congress passed this spring but talks between the Trump administration and Congress for additional airline aid have repeatedly derailed.
More airlines are competing for price-sensitive leisure travelers within the United States but demand has struggled, despite an uptick from multi-decade lows hit in April. The Transportation Security Administration screened nearly 64 million people at U.S. airports in the third quarter, up 150 percent from the three months ended June 30 but still down from the 221 million people TSA screened in the year-earlier period.
About 18,000 Delta employees — about one-fifth of its pre-pandemic workforce — accepted buyouts and early retirement packages.
Delta and its competitors have scrambled to introduce enhanced cleaning procedures and other policies, to calm travelers nervous about flying during the pandemic. Delta, for example, leaves middle seats open on flights.
Delta was able to cut its daily cash burn by more than 44 percent from roughly $43 million during the second quarter to an average of $24 million a day. Delta got down to $18 million a day in September, an improvement, but still far off its goal of breaking even by the end of the year.
“While our September quarter results demonstrate the magnitude of the pandemic on our business, we have been encouraged as more customers travel and we are seeing a path of progressive improvement in our revenues, financial results and daily cash burn,” Delta’s CEO Ed Bastian said in an earnings release.
Since the pandemic began, Delta has posted more than $11 billion in losses.