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Mar 31, 2020
Delta Q1 2020 Earnings Report
Delta Air Lines reported a GAAP pre-tax loss of $607 million and an adjusted pre-tax loss of $422 million for the March quarter 2020, while also outlining its response to the COVID-19 global pandemic.
Key Takeaways
Delta Air Lines announced its March quarter 2020 financial results, revealing a GAAP pre-tax loss of $607 million or $0.84 per share and an adjusted pre-tax loss of $422 million or $0.51 per share. The company is responding to the COVID-19 global pandemic by prioritizing safety, protecting its business, and bolstering liquidity.
Expected June quarter revenues to decline by 90% compared to the previous year due to the impact of government travel restrictions and stay-at-home orders.
Cash burn was $100 million per day at the end of March and is expected to moderate to approximately $50 million per day by the end of the June quarter through decisive actions.
The company expects to end the June quarter with approximately $10 billion in liquidity.
Delta is taking decisive action to prioritize the safety of its employees and customers while protecting its business and bolstering liquidity.
Delta
Delta
Forward Guidance
Delta anticipates a significant reduction in expenses and aims to moderate cash burn through various measures.
Positive Outlook
- Expected June quarter total expenses to decline by approximately 50%, or $5 billion, over prior year due to reduced capacity.
- Lower fuel costs.
- Cost initiatives.
- Payroll Support Program under the CARES Act will help safeguard Delta jobs.
- Decisive actions are expected to moderate cash burn to approximately $50 million per day by the end of the June quarter.
Challenges Ahead
- Government travel restrictions and stay-at-home orders have severely impacted near-term demand for air travel.
- Expected June quarter revenues to decline by 90 percent, compared to a year ago.
- Significant impact of COVID-19 on Delta’s revenue.
- Burning $100 million per day at the end of March.
- Uncertainty in economic conditions and regulatory environment in the United Kingdom related to the exit of the United Kingdom from the European Union.