Delta Air Lines (NYSE:DAL) on Thursday said it expects to be burning through $30 million per day by the end of the second quarter, far better than its original $50 million daily burn goal, and expects to hit break even by next spring.
Airlines have been hard hit by the COVID-19 pandemic, which has crushed demand for travel and left the companies scrambling to raise cash to avoid liquidity issues. Delta was burning through nearly $100 million per day at the height of the crisis, but has cut costs by bringing down its schedule and retiring a number of fleet types.
In recent weeks, the airlines have been adding flights to their summer schedules in response to growing demand, with Delta saying it would add nearly 1,000 flights in July. But even with those additions the schedule is still well below pre-crisis levels.
CEO Ed Bastian, speaking at the airline's virtual annual meeting on Thursday, said Delta expects its domestic capacity to be down 55% to 60% year over year in August. Bastian emphasized that the recovery is fragile and said the airline will take a cautious approach to growth.
Airline investors in recent days have been fixated on rising COVID-19 cases in some key U.S. states, worrying that states are reopening too soon and there could be a second wave of the pandemic. Bastian said the airline expects to get back to cash break-even sometime around next spring, either through additional cost cuts or thanks to improving revenue.
The pandemic has taken a personal toll on the airlines as well. Bastian said that about 500 Delta employees have been diagnosed with COVID-19, and ten have died.