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Delta takes $5.4 billion loss, says recovery could take years

Virus Outbreak Arizona Grounded Planes
Posted at 6:52 PM, Oct 13, 2020
and last updated 2020-10-13 22:56:18-04

Delta Air Lines had a nearly 75% drop in revenue in the third quarter of 2020 compared to 2019 as many coronavirus-weary travelers are putting off excursions on airplanes.

The airline has had to cut flights, block middle seats, and scale back its operations due to the coronavirus pandemic. Worse, funds from the federal government to make payroll ran out Oct. 1. Delta has said, however, it intends to hold off furloughing or laying off employees until November.

In the wake of the pandemic, Delta said it is putting off a $5 billion purchase of airplanes through 2022.

While Delta’s revenue dropped by over 75%, its expenses only dropped 10%, some of which is due to a drop in fuel costs.

Despite a gloomy financial picture, there is optimism travelers are beginning to return to the skies.

“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,” said Ed Bastian, Delta’s Chief Executive Officer. “The actions we are taking now to take care of our people, simplify our fleet, improve the customer experience, and strengthen our brand will allow Delta to accelerate into a post-COVID recovery.”

But even with a slow return to normalcy, Delta expects revenues to be down for years to come.

“With a slow and steady build in demand, we are restoring flying to meet our customers’ needs, while staying nimble with our capacity in light of COVID-19,” said Glen Hauenstein, Delta’s President. “While it may be two years or more until we see a normalized revenue environment, by restoring customer confidence in travel and building customer loyalty now, we are creating the foundation for sustainable future revenue growth.”