Atlanta-based Delta Air Lines (NYSE: DAL) reported the biggest second-quarter loss in more than a decade as coronavirus pandemic has halted its flight operations throughout the quarter. Its second-quarter revenue plunged 88% year over year to $1.47bn.
On the positive side, the passenger airline company claims that it has reduced the cash burn rate from $100m to $20m a day by the end of the second quarter.
Besides the worst second-quarter performance since 2008, the Atlanta based company has presented a bleak outlook for the rest of the year. The air travel company forecasts at least two years for a full recovery.
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“Given the combined effects of the pandemic and associated financial impact on the global economy, we continue to believe that it will be more than two years before we see a sustainable recovery,” states CEO Ed Bastian.
The shares of the second-largest US passenger airline plunged following the second-quarter earnings report. Its shares are down more than 50% since the beginning of this year.
Delta Air Lines plans to reduce its cost structure in the following quarter to trim losses and cash burn rate.
It expects to achieve a 50% year over year cost base reduction for the third quarter. The massive growth in coronavirus infections has also forced the company to slash its planned August schedule by half.
Previously, Delta and its competitors suggested employees take early retirement as passenger airline is struggling to cover expenses. The airline is forbidden to layoff employees until Oct. 1 due to its agreement with the US government under the terms of $25 billion in federal aid.
The company has raised almost $15bn since March this year, including the unsecured loan under the CARES Act. The majority of market analysts expect Delta Air Lines stock price to extend the bearish trend in the second half of the year.
