Delta today released their third-quarter results for 2020 where the carrier had recorded a net loss of $5.3 billion compared to a profit of $1.49 billion made in the same quarter last year. The continued poor financial results are due to the COVID-19 Pandemic that is still wreaking havoc for the aviation industry and impacting demand for air travel globally.
The airline had incurred a $3.1 billion restructuring charge in Q3. Operating revenue was at $3 billion a 76% fall compared to Q3 2019 results where they made $12.5 billion whereas operating expenses fell 10% YoY to $9.4 billion in the quarter ending September 2020 and has refunded around $2.8 billion back to customers year-to-date.
Delta also disclosed their fleet planning strategy where they restructured their Airbus and CRJ order books to receive it when needed over the next several years and the restructuring essentially reduced purchase commitments for aircraft by over $2 billion in 2020 and over $5 billion through to 2022.
Delta’s Fleet Retirement Timeline
|Aircraft Type||Number of Aircraft||Estimated Final Retirement During the Quarter Ending|
The Fleet simplification strategy would see around 400 aircraft to face an accelerated retirement by 2025 which includes over 200 aircraft that will have been retired during 2020. The fleet changes were made to generate cost savings, modernize and streamline the fleet while also enhancing the customer experience.
The airline for Q3 had a cash burn of $24 million per day and during the month of September, cash burn fell to $18 million per day.
CEO of Delta, Ed Bastian stated, “While our September quarter results demonstrate the magnitude of the pandemic on our business, we have been encouraged as more customers travel and we are seeing a path of progressive improvement in our revenues, financial results and daily cash burn” and added “The actions we are taking now to take care of our people, simplify our fleet, improve the customer experience, and strengthen our brand will allow Delta to accelerate into a post-COVID recovery.”
The airline ends September with a strong liquidity position of $21.6 billion which should help in the short to medium term. It must be noted that the airline’s total debt and finance lease obligations were $34.9 billion with net debt (adjusted) of $17 billion at the end of September.
Connect with us on Facebook – here
Hope you enjoyed it!
“When Borders Don’t Matter”
Final Year Aviation Management Student at Coventry University.