Delta Air Lines (DAL) is cutting flights from its schedule moving forward after posting its worst financial losses since the 2008 recession. On Tuesday, the company reported a $5.7 billion net loss for the second quarter, while its price of shares dropped 3% during late-morning trading.
Prior to this announcement, Delta had planned to add 1,000 flights per day in August, off the back industry optimism as business ticked up in June and July. CEO Ed Bastian says that this number will be trimmed to 500, as cases of COVID-19 soar in many states and new travel restrictions are imposed in the Northeast.
“Demand has stalled as the virus has grown, particularly down here in the South, across the Sun Belt, coupled with the quarantine measures that are going in place in many of the Northern states,” Bastian explained to CNBC. “Those two factors are causing consumers to pause.”
Despite losing more during 2008, Bastian said that this most recent quarter was the worst in Delta’s history. From April to June, the Atlanta-based airlines reportedly lost $43 million in cash per day. Revenue fell a staggering 91% in the wake of the pandemic, while Bastian estimated that overall travel will end being 20-25% of the usual levels over the course of the summer.
“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,” Bastian said during a Delta earnings call.
With other airlines preparing for potential layoffs and furloughs in the future, Bastian is optimistic that Delta will be able to avoid involuntary actions. He claimed that around 17,000 employees have accepted voluntary buyouts and early retirement packages.