Delta Air Lines on Tuesday reported a $7 billion pretax loss for the second quarter, citing a severe decrease in revenues due to the depressed demand wreaked by the coronavirus pandemic.
Revenues tumbled nearly 90 percent to $1.47 billion, illustrating “the truly staggering impact of the COVID-19 pandemic on our business,” Delta CEO Ed Bastian said.
Bastian added that Delta was able to reduce its average “daily cash burn” rate by more than 70 percent to $27 million during the second quarter, but the airline foresees more of the same kind of lost revenue in the near term.
“Given the combined effects of the pandemic and associated financial impact on the global economy, we continue to believe that it will be more than two years before we see a sustainable recovery,” he said.
The U.S. and global airline industries have seen travel demand plummet since the coronavirus crisis arrived in March. Per-mile revenue contracted by 91 percent year-over-year in May after posting a 94 percent decline the previous month, according to the International Air Transport Association.
Although airlines have canceled flights and grounded thousands of aircraft in response to the health crisis, global passenger demand still fell faster than capacity in May, the industry group said.
U.S. airlines are trying to cope with the downturn through layoffs and furloughs.
American Airlines warned unions this week that labor notices will soon be sent to workers and United said last week as much as 40 percent of its staff could be furloughed if not enough employees opt for buyouts or early retirement.
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