A Delta Air Lines plane lands at Los Angeles International Airport
Mario Tama | Getty Images
Delta Air Lines said Thursday that it has halved its cash burns and halved its losses in the fourth quarter, as the coronavirus pandemic brought the carrier to its worst year in history.
The Atlanta airline reported a net loss of nearly $ 12.39 billion in 2020 – a record, according to FactSet data.
Here’s how Delta performed in that quarter, compared to what Wall Street expected, based on average estimates compiled by Refinitive:
- Adjusted earnings per share: a loss of USD 2.53 compared to an expected loss of USD 2.50
- Total revenue: $ 3.97 billion compared to projected revenue of $ 3.59 billion
Delta rose to a net loss of $ 755 million in the fourth quarter, compared to a profit of $ 1.1 billion a year earlier. Total revenues decreased by 65%, from $ 11.44 billion in the fourth quarter of 2019 to $ 3.97 billion. The company’s revenue gained $ 441 million from third-party refinery sales. Adjustedly, Delta had a loss of $ 2.53 per share compared to analysts’ estimates of a loss of $ 2.50 per share.
The carrier’s cash outflow averaged $ 12 million a day in the December 31 quarter, down half the average $ 24 million a day in cash in the third quarter. Delta said it expects to have a positive cash flow by spring.
Delta shares rose 1.5% in premarket trading after Delta reported results.
The airline will face difficult months ahead, but is looking for a recovery in 2021 as Covid vaccines are administered across the country, CEO Ed Bastian said.
“As our challenges continue in 2021, I am optimistic that this will be a year of recovery and a turning point that will result in an even stronger Delta in terms of revenue growth, profitability and free cash generation,” Bastian said. .
Delta said revenues are expected to fall from 60% to 65% in the first quarter of the year compared to the previous year, right at the beginning of the pandemic. It is worse than analysts’ estimates for a 48% year-over-year decline.
The pandemic has devastated travel demand, due to concerns about viruses, quarantines, travel restrictions and business travel breaks, which have kept millions of potential customers at home. The Transportation Security Administration examined only 324 million passengers last year, down from 824 million in 2019.
Airline executives had hoped that the launch of the vaccines would provide relief, but repeatedly warned that it would not be immediate.
“The early part of the year will be characterized by a turbulent demand recovery and a reserve curve that remains compressed, followed by a turning point and, finally, a sustained demand recovery, as customer confidence gains momentum. “vaccinations are spreading and offices are opening again,” Delta President Glen Hauenstein said in a statement.
Delta said it ended the fourth quarter with $ 16.7 billion in liquidity. Delta raised billions in debt last year, including a record $ 9 billion in sales, backed by its SkyMiles frequent flyer program.
The carrier and its rivals are also receiving additional federal funds to help resolve the crisis. Congress approved at the end of last year an additional $ 15 billion in federal aid to airlines to pay workers, in addition to the $ 25 billion in state wage support they received under the March CARES Act. .