Delta sees 90% drop in revenue, hopes to stop losing cash by December

Delta sees 90% drop in revenue, hopes to stop losing cash by December

Delta Air Lines Inc. said late Wednesday it is taking measures to remain liquid for the year as the COVID-19 pandemic trashes the airline’s revenue. Delta shares fell 2.1% after hours, following a 7.4% decline in the regular session to close at $31.64. In a filing with the Securities and Exchange Commission, the airline said it expects second-quarter revenue to be off 90% from a year ago with capacity down 85%. Delta reported second-quarter revenue of $12.54 billion in the year-ago period, so a 90% drop in revenue would result in $1.25 billion. Analysts surveyed by FactSet expect revenue of $1.52 billion. Delta said it expects to reduce its daily cash outflow to $40 million by the end of June, down from the $100 million a day it was losing back on March 31, and hopes to reduce that to zero by the end of December. “We believe this improvement in average daily cash outflow would result from modest continued demand recovery, particularly with domestic leisure travel beginning to return as states lift shelter-in-place orders, and additional cost-cutting initiatives,” Delta said in the filing, adding that it expects the recovery in international demand to lag domestic demand. “We have added 100 additional domestic flights in June and plan to continue to rebuild our schedule in the September 2020 quarter as demand returns,” Delta said. The airline said it hopes to have $10 billion in cash by the end of December, having raised more than $10 billion in funds since March through new debt and the Payroll Support Program under the Coronavirus Aid, Relief and Economic Security Act.

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