Delta Air Lines calls 2021 recovery year after first loss in 11 years
Delta Air Lines CEO Ed Bastian expects 2021 to be the “year of recovery” after the coronavirus pandemic slashed airline operating revenues by 64% and resulted in first annual losses in 11 years.
«We don’t expect travel rates to return close to where they were before by summer, but it will be a significant improvement, enough to keep us profitable in the second half of the year.», – said Ed Bastian (Ed Bastian).
The strength of recovery will depend on factors such as the rate at which the vaccine is introduced and people’s appetite for flight thereafter. a crisis year when travel around the world almost stopped.
In the first quarter, the Atlanta-based airline expects its revenue to drop 60–65% compared to last year, and scheduled flights will decrease by 35%.
As the air carrier continues to block middle seats on planes until at least March 30th, Delta expects the actual capacity it will sell to drop by about 55%.
It will take at least another year to recover international travel, hit hard by travel bans, and the Delta CEO said the airline will continue to spend between $ 10 million and $ 15 million a day in the first quarter of 2021..
The company said it was losing an average of $ 12 million a day in the fourth quarter, but still intends to halt such a volume of cash flaring in the spring..
As the chief economist said on Thursday IATA Brian Pier (Brian Pearce), International Air Transport Association believes there may not be a return to positive cash flow in the industry this year as renewed restrictions and new lockdowns put an end to an already weak increase in bookings.
Delta is expected to have $ 18 billion to $ 19 billion in liquidity by the end of March, including an additional $ 3 billion in government payroll support, with a net debt of around $ 18 billion..
In 2020, the company had $ 16.7 billion in liquidity after a series of measures to mobilizing capital.
Delta Airlines, the first American airline to publish 2020 results, reported a loss of $ 12.4 billion, which occurred for the first time since 2009, with operating revenue of $ 17 billion. A year earlier, the airline made a profit of $ 4.8 billion.
In the fourth quarter, the company lost $ 755 million, or $ 1.19 per share. Adjusted loss per share was $ 2.53 vs. analyst estimate of $ 2.51.
Delta shares jump 2.2% in pre-sale trading following the results of the report.
Delta recorded $ 1 billion in COVID-19-related expenses during the quarter, although total adjusted operating expenses were down $ 4.6 billion, or 47%, due to lower fuel, maintenance and wages costs.
Delta avoided layoffs, but said nearly 18,000 employees, or 20% of its workforce, have decided to leave in 2020..
Delta No Plans to Lay Off Employees After Second Round of State Support to Airlines Expires in March.
The company plans to decommission nearly 400 aircraft by 2025 as it aims to streamline its fleet to nine aircraft families..
Bastian previously hinted at the possibility of buying a Boeing Co 737 MAX.
He said he very much hopes that the US government will lift the ban on international travel by spring or summer if the coronavirus is contained..
Addressing the disruption of recent flights to the US by supporters of the US President Donald Trump, Bastian said Delta brought in passengers involved in incidents against senators Mitta Romney and Lindsay Graham, to the list of persons who are prohibited air travel.