Delta Air Lines is cutting in half the number of flights it planned to add next month as the coronavirus pandemic saps demand. The carrier on Tuesday posted a $5.7 billion net loss in the second quarter, its biggest since 2008.
Delta’s shares were down more than 3% in late-morning trading, while other airline stocks traded higher.
The Atlanta-based airline planned to add 1,000 flights a day in August but will now add just 500. Demand has softened as new cases of coronavirus surge and states like New York tell arriving travelers to quarantine in an effort to stop the disease from spreading.
“Demand has stalled as the virus has grown, particularly down here in the South, across the Sun Belt, coupled with the quarantine measures that are going in place in many of the Northern states,” CEO Ed Bastian told CNBC’s “Squawk Box.” “Those two factors are causing consumers to pause.”
Delta slashed its daily cash burn to $27 million by the end of June from roughly $100 million a day at the end of March. The airline has said it wants to break even by the end of the year. It said it has 19 months of liquidity and had $15.7 billion at the end of the quarter.
Bastian said Delta will likely have a similar cash burn in July and that it needs to see renewed confidence from customers willing to travel to further reduce that amount.
Airlines are among the industries hardest hit by the pandemic as worries over the virus and an unprecedented series of travel restrictions in the U.S. and abroad curtail travel. Carriers like Delta have parked hundreds of planes, slashed routes and encouraged tens of thousands of employees to take unpaid time off.
Delta’s revenue in the quarter ended in June fell 88% from a year earlier to $1.47 billion, slightly higher than analysts’ estimates and roughly in line with the carrier’s forecast for a 90% drop. On an adjusted per-share basis, Delta lost $4.43, above the $4.07 per-share loss analysts forecast.
Delta and its competitors are urging employees to take buyouts or early retirement packages as they scramble to reduce their payroll. They’re prohibited from laying off staff until Oct. 1 under the terms of $25 billion in federal coronavirus aid but have already started to warn employees about potential cuts…
