Delta Air Lines (NYSE:DAL) and JetBlue Airways (NASDAQ:JBLU) both said Friday they are applying for federal assistance under the Coronavirus Aid, Relief and Economic Security (CARES) Act, emphasizing the precarious state the airlines are in.
Airlines have been hard hit by the COVID-19 pandemic, losing a huge share of their customers as travel demand all but evaporated overnight. They have drastically cut back on flights and grounded planes to trim their costs, but no amount of cutting can offset their falling revenues.
Delta CEO Ed Bastian said in a memo to staff the airline is burning through more than $60 million a day, and that he expects second-quarter revenue will be down 90% year over year. The airline had 38,000 passengers on its planes last Saturday. On a normal late-March Saturday, it carries 600,000.
Bastian said that while he appreciates the government's support, "without the self-help actions we are taking to save costs and raise new financing, that money would be gone by June." Delta's flight schedule is 80% below original projections, he said.
Meanwhile, JetBlue said that it expects about 7,000 customers daily this month, down from the 120,000 it would expect during a normal April. On a typical April day in 2019, the airline took in about $22 million in bookings and fees. It's currently bringing about $1 million daily and issuing about $2 million a day in cash refunds.
CEO Robin Hayes told employees JetBlue is burning through its cash cushion at a rate of about $10 million a day, even after parking more than 100 aircraft and reducing its schedule by 70%.
"Today we submitted our application for payroll support funds to the Treasury Department and we now enter negotiations with the U.S. Government," Hayes said in a press release. "I hope things can move quickly, and we are available this weekend so we can conclude an agreement next week, as time is of the essence."
In order to qualify for that federal aid, airlines will be required to maintain minimum service levels and avoid layoffs through Sept. 30, among other conditions, but all the U.S. carriers are expected to apply. American Airlines Group has said it will seek $12 billion in government funding, and Southwest Airlines management has indicated the airline intends to request funds as well.