We May Never See as Many Business Travelers as Before: Delta Air Lines CEO
Skift Take
On most financials, Delta has been one of the two strongest U.S. airlines for some time. But it reported a massive second quarter loss. If it's this dire for Delta, how will the rest of the U.S. airlines fare? Here's a hint: Not well.
Delta Air Lines executives do not expect "sustainable recovery" for two years or more, nor do they predict business travel ever will revert to 2019 traffic levels, they told analysts Tuesday, while announcing a second-quarter pre-tax loss of about $7 billion.
Delta executives have said for months they expect to emerge from Covid-19 running a smaller airline, but like many competitors, they tried to strike a more positive tone in earlier comments. Some of that was missing on Tuesday, as they told analysts this summer's domestic travel recovery not only had begun to slow, but may never have been as robust as some had hoped.
The problem is money. More people are traveling now than two months ago, as Transportation Security Administration screening numbers show, but Delta remains in considerable financial distress. In June, the airline averaged $27 million in cash burn per day, a considerable decrease from $100 million in late March, but still not sustainable. And with "demand growth stalled," according to CEO Ed Bastian, Delta should burn roughly the same this month.
"While it's encouraging to see customers start to return, the revenue environment remains challenging," Bastian told analysts on the carrier's second-quarter earnings call. "We have thought from the start that the recovery will be choppy, and the past few weeks have s
