Delta Air Lines lost $534 million in the first quarter of 2020, a setback for the biggest and most profitable U.S. airline.
The company predicted Wednesday that its revenue for the year’s second quarter, typically a high-travel time, will also nosedive by 90 percent amid the coronavirus pandemic.
“These are truly unprecedented times for all of us, including the airline industry,” said Delta CEO Ed Bastian. “Government travel restrictions and stay-at-home orders have been effective in slowing the spread of the virus, but have also severely impacted near-term demand for air travel, reducing our expected June quarter revenues by 90 percent, compared to a year ago.”
“Delta is taking decisive action to prioritize the safety of our employees and customers while protecting our business and bolstering liquidity,” he added.
Delta is the first U.S. airline to detail the financial damage it has endured in the first quarter as a result of the coronavirus. The airline said it will now focus on cutting costs and borrowing the billions it will need ride out the storm, hoping to slow its daily cash burn to about $50 million in the coming months.
Among the steps Delta is taking to cut costs are curtailing its schedule, cutting passenger-carrying capacity, closing airport lounges and offering unpaid leave.
Delta is set to receive $5.4 billion in grants and loans from the federal government and can still apply for another $4.6 billion.
Delta is one of several airlines receiving billions in stimulus funds from the federal government as the industry suffers a sharp drop in profits. While executives once hoped for the dip to be short-lived, many have warned of a longer recovery with even steeper impacts on their bottom lines.
“The recovery is going to take much longer than any of us would like to see,” Bastian said on CNBC. “It may take two to three years to build it back. People will come back.”