Delta is the first of the major US airlines to announce its third-quarter earnings. Not surprisingly, the news wasn’t good. The airline lost more money than expected over the last three months, $3.30 per share, which was even more than the $3 per share that the stock market was expecting.
The main driver behind the losses is the dramatic decrease in passenger traffic. According to Delta CEO Ed Bastian, Delta saw an 80% decrease in passenger traffic in Q3 over the past year. That’s good news for Delta since in Q2 they saw a 90% decrease in traffic, so things are improving. He estimates that in Q4, passenger traffic will increase to 30-35% of 2019 levels.
Delta is still burning cash, but at a decreased level than before. In September, they were only losing $18 million a day, down from $43 million in the second quarter. With slowing increasing demand and managing costs, Delta hopes to be cash-flow break-even (not losing money) or positive by spring 2021.
Remember, Mr. Bastian has previously stated that he thinks it will take Delta two to three years to recover from business losses due to COVID-19.
Here’s a 4-minute section of the interview from CNBC.
We will get a better idea of the financial situation for the entire US airline industry very soon. United Airlines is set to release its earnings tomorrow. We’ll then get the earnings from American, Southwest, Spirit, JetBlue, Alaska, and Hawaiian between October 20-22.
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This post first appeared on Your Mileage May Vary