Delta Air Lines (DAL 0.33%) today announced its first quarter results, saying operating revenue dropped 18% versus the year ago period and that it was burning cash at a rate of $100 million per day at the end of March. The company said that its biggest financial priority remains conserving cash and improving liquidity.
Delta CEO Ed Bastion had previously announced financial initiatives, including securing a new $2.6 billion credit facility while drawing down $3 billion on an existing facility. Bastion also has announced the largest capacity reduction in the company's history, at least $2 billion in capital expenditure cuts, and suspension of his full salary for a six month period.
Delta also announced further money raising activities recently. It secured a $3 billion term loan, closed $1.2 billion in aircraft sale-leaseback arrangements, and accepted $5.4 billion in federal aid under the Payroll Support Program under the CARES Act.
Its plan to cut cash burn in half by the end of June includes overall capacity reductions for the quarter of 85% versus last year. It will park more than 650 aircraft, consolidate airport facilities with concourse and Delta Sky Club closures, and realigning staffing.
Staffing changes include a hiring freeze, 37,000 employees accepting a voluntary unpaid leave option, reduced work schedules, and salary reductions for executives. It expects these actions to allow it to end June with about $10 billion in liquidity.