Skip to content

Delta Air Lines revenue slip 88%, full recovery could take two years

Delta Air Lines revenue slip 88%, full recovery could take two years

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.    

“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.

DAL Delta Air Lines, Inc. daily Stock Chart
Finviz.com data.

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.  

Best Crypto Exchange for Intermediate Traders and Investors

  • Invest in cryptocurrencies and 3,000+ other assets including stocks and precious metals.

  • 0% commission on stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.

  • Copy top-performing traders in real time, automatically.

  • eToro USA is registered with FINRA for securities trading.

30+ million Users
Securities trading offered by eToro USA Securities, Inc. (“the BD”), member of FINRA and SIPC. Cryptocurrency offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Finbold.com is not an affiliate and may be compensated if you access certain products or services offered by the MSB and/or the BD

Read Next:

Finance Digest

By subscribing you agree with Finbold T&C’s & Privacy Policy

Related posts

Sign Up

or

By submitting my information, I agree to the Privacy Policy and Terms of Service.

Already have an account? Sign In

Services

IMPORTANT NOTICE

Finbold is a news and information website. This Site may contain sponsored content, advertisements, and third-party materials, for which Finbold expressly disclaims any liability.

RISK WARNING: Cryptocurrencies are high-risk investments and you should not expect to be protected if something goes wrong. Don’t invest unless you’re prepared to lose all the money you invest. (Click here to learn more about cryptocurrency risks.)

By accessing this Site, you acknowledge that you understand these risks and that Finbold bears no responsibility for any losses, damages, or consequences resulting from your use of the Site or reliance on its content. Click here to learn more.