What happened

Shares of Delta Air Lines (NYSE:DAL) traded down more than 7% on Monday as investors continue to digest the impact of the COVID-19 pandemic on the industry. The airlines got their $50 billion government relief package last week, causing a multiday rally in the shares, but even with stimulus this industry still faces a challenging future.

So what

The airlines have been hard-hit by the pandemic, with travel demand grinding to a halt as the virus has spread globally. Delta said earlier this month that it is currently burning through $350 million a week and expects second-quarter revenue to fall 80% year over year.

Delta's long-term credit rating was cut to junk status last week due to fears of a sustained downturn.

A Delta A321 coming in for a landing.

Image source: Delta Air Lines.

The bailout package will allow the airlines to buy time to see how quickly demand rebounds, but the companies have warned that more drastic measures might be needed. The airlines are expected to meet with government officials this week to discuss waiving airport usage requirements and allowing competitors to temporarily coordinate schedules to sustain service to smaller markets that would otherwise be served today with near-empty jets.

It seems likely that even if the pandemic is contained in the months to come, business travel and conferences will be slow to bounce back, meaning that even in the best case, demand for plane tickets will remain soft into the second half of 2020.

Now what

The near-term outlook for the industry is dire, but Delta and Southwest Airlines are the two airlines best positioned to weather the storm, and Delta's shares have fallen significantly more than Southwest's have.

DAL Chart

Delta vs. Southwest year to date data by YCharts

For those able to stomach further volatility and invest for the long haul, I believe Delta shares are attractive right now despite the turmoil. Just be warned that the recovery will take time, and more down days could lie ahead.