Delta CEO: We’re losing $60 million a day as the coronavirus pandemic rages on

FILE PHOTO: Delta Air Lines passenger planes parked in Birmingham

caption
FILE PHOTO: Delta Air Lines passenger planes parked in Birmingham
source
Reuters
  • Delta is burning through more than $60 million of cash each day, as it sees more than a 95% drop in demand from the same period last year.
  • In a memo to staff, CEO Ed Bastian said that the airline had canceled 115,000 flights for April, more than 80% of its schedule, as the coronavirus pandemic continues to decimate the airline industry.
  • Bastian also said that the airline had applied for payroll grants, part of the federal COVID-19 aid package.
  • Visit Business Insider’s homepage for more stories.

Delta Air Lines is burning through more than $60 million in cash every day as it continues to operate through the COVID-19 pandemic.

In a memo to staff on Friday, CEO Ed Bastian laid out some of the starkest numbers seen thus far in the crisis, demonstrating the scale of the hit to the global airline industry.

The airline is continuing domestic operations and several international routes, but it has canceled about 115,000 flights for April, Bastian said, or 80% of its total schedule. Last Sunday saw just 38,000 passengers fly, compared to 600,000 the last Sunday of March in 2019.

Bastian also wrote that revenue is expected to be down 90% for the second quarter.

The airline industry has been devastated by the pandemic as travel bans, border closures, and shelter-in-place orders have put a near-halt to domestic and international travel markets that were booming just two months ago.

Nearly $60 billion was set aside for airlines in the federal coronavirus stimulus package passed last week, split evenly into payroll grants and loans. Bastian said that Delta had submitted an application for the payroll grants, which will allow it to pay workers despite the lack of revenue.

The payroll grants require airlines receiving them to agree not to reduce staff through involuntary layoffs or furloughs until October 2020, and prohibit them from buying back stock or issuing shareholder dividends. Airlines are also required to maintain a certain degree of connectivity and service, even with low passenger loads.

Delta has argued that the payroll grants are not enough to keep the airline running fully. More than 30,000 of the airline’s nearly 90,000 employees have taken voluntary unpaid leaves. Some workers remaining on duty are seeing reduced hours and pay.