Cut cash burn in half


A Delta Air Lines plane lands at Los Angeles International Airport

Mario Tum | Getty Images

Delta Air Lines halved its cash burn and reduced its losses in the fourth quarter as the coronovirus epidemic replaced the carrier in its worst year, the company said on Thursday.

The Atlanta-based airline reported a net loss of approximately $ 12.39 billion in 2020, according to FactSet data.

Here’s what Delta expected of Wall Street, based on average estimates compiled by Refinitive:

  • Adjusted EPS: $ 2.50 vs. expected loss of $ 2.50
  • Total revenue: $ 3.97 billion, adjusted to return refinery sales 3.53 billion

Delta incurred a net loss of $ 755 million in the fourth quarter, compared to $ 1.1 billion a year earlier. Total revenue fell 65% to $ 3.97 billion from $ 11.44 billion in the fourth quarter of 2019. The company’s revenue was boosted by $ 441 million from third-party refinery sales. On an adjusted basis, Delta’s loss per share was $ 2.53, compared to analyst estimates for a loss of $ 2.50 per share.

Carrier’s cash burn ended at an average of $ 12 million per day, down half from the average cash burn of $ 24 million a day in the third quarter. Delta has said that it expects to achieve cash flow positively by spring.

After Delta reported its results, Delta shares had risen by more than 2% in prepaid trading.

CEO Ed Bastian said the airline would face difficulties in the coming months, but recovery in 2021 is being monitored as Kovid-19 vaccines are introduced nationwide.

“While our challenges continue into 2021, I am optimistic that this will be a year of recovery and a turning point, resulting in a more robust delta return to revenue growth, profitability and free cash generation,” Bastian said.

Delta said it expected revenue to decline by 60% to 65% from the first quarter of the year, the way the epidemic was beginning. This is lower than analyst estimates for a 48% year-on-year decline.

The epidemic’s disastrous travel demand in the form of viruses, quarantine, travel restrictions and business travel breaks kept millions of potential customers at home. The Transportation Security Administration screened just 324 million passengers last year, down from 824 million in 2019.

Airlines officials hope that the rollout of the vaccine will provide some relief but have repeatedly warned that this will not happen immediately.

“The early part of the year will be characterized by choppy demand recovery and a booking curve, which remains narrow, followed by a inflection point, and eventually gains customer confidence in the form of a continuous demand recovery, vaccinations become widespread. And the offices are open again, “Delta President Glenn Hauenstein said in a release of the proceeds.

Delta said it ended the fourth quarter with $ 16.7 billion in liquidity. Delta raised billions of dollars in debt last year, including a record $ 9 billion in debt sales, supported by its continuously flying program SkyMiles.

The carrier and its rivals are also receiving additional federal funds to help with the weather. Congress approved $ 15 billion in additional federal aid to pay workers to airlines late last year, topping them with $ 25 billion in government payroll support under the March Peres Act.

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