ATLANTA — Delta Air Lines lost $5.7 billion during a brutal three-month stretch in which the coronavirus pandemic brought travel to a near standstill, and any hoped-for recovery has been smothered by a resurgence of infected Americans.
“Growth has stalled,” Delta CEO Ed Bastian said. “It was growing at a pretty nice clip through June. The virus, unfortunately, was also growing.”
Bastian said it will take more than two years for the airline to make “sustainable” recovery.
Delta is the first U.S. airline to report financial results for the May-through-June quarter, and the numbers were ugly.
Passengers boarding Delta planes tumbled 93% from a year earlier, revenue plummeted 88%, and the company’s losses were worse than anticipated.
Channel 2′s Dave Huddleston spoke with a local CEO who says his company’s travel is down 90% this year.
“This is the longest I’ve gone in 30 years without being on an airplane and at this point I’m not sure when I’ll return to flying,” Cognia President and CEO Mark Elgart said. His school testing company has offices all over the world. He says before the pandemic he flew 150,000 to 200,000 miles a year on Delta.
Channel 2 Consumer Advisor Clark Howard says its a disaster for everyone in the travel business.
“It’s very concerning, because they are such an important part of our community,” Howard said.
Airlines are expected to furlough thousands of workers when federal aid to help cover payroll expenses runs out on Oct 1. Bastian held out hope that Delta might avoid those cuts because 17,000 of its 91,000 employees have accepted early retirement. Another 35,000 are taking unpaid leave in July.
Air travel within the United States fell 95% from the start of March until mid-April, when fewer than 100,000 people boarded airline planes on some days, down from more than 2 million a day a year earlier. That rose to more than 700,000 on the best days, but it has hit a plateau in July, coinciding with increased COVID-19 cases across the Sun Belt.
Delta, along with Southwest and JetBlue, has limited capacity to about 60% on domestic flights. United and American don’t block seats.
Airline customers have historically put a priority on fare prices, but Bastian thinks that could be changing. Customers are telling the airline they are uncomfortable boarding packed planes, and fully booking flights “is not what Delta is going to do,” he said.
Delta has promised to cap seating through Sept. 30.
Three passengers tested positive for COVID-19 the day after a July 6 Delta regional flight from Atlanta to Albany, New York, prompting New York officials to recommend that other passengers contact their local health authorities. Bastian said such events are “rare,” but didn’t say how many times it’s happened.
Delta is getting $5.4 billion in federal aid to help pay workers through Sept. 30 and has been offered a $4.6 billion loan by the Treasury. It hasn’t decided whether to take the money because it could find better terms on the private market.
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