Delta Air Lines (DAL -0.11%) today reported a net loss of over $9 per share, or $5.7 billion, in the second quarter. The net loss includes the recognition of $1.3 billion the company received under the CARES Act payroll support program. Passenger revenue was down 94% compared to a year ago, but "non-ticket" revenue, which includes cargo, fared slightly better, with a decline of 65%. The revenue drop stems from the airline operating at 85% lower capacity than a year ago.
When the company reported first-quarter results in April, it said it was burning through $100 million per day in cash at the end of March. Today, Delta said it had reduced that daily cash burn rate to $27 million for the month of June, and said its goal was to be cash burn breakeven by the end of 2020.
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Adjusted revenue was down 91% compared to the year-ago period. Delta CEO Ed Bastion said "we continue to believe that it will be more than two years before we see a sustainable recovery." The company has been focusing on preserving financial liquidity.
Since early March, including support from the CARES Act payroll support program initiative, the company has raised almost $15 billion from sources that also included a debt offering, aircraft sale-leaseback agreements, and borrowing from credit facilities. It has also made preparations for $4.6 billion under the CARES Act secured loan program, which the company said it is eligible for, should it decide to participate. It has until Sept. 30 to decide.
Cost-saving initiatives have included plans to retire its entire MD-88, MD-90, 777, and 737-700 fleets in 2020; initiating voluntary separation and early retirement programs; and accelerating airport construction projects in several cities, which will lower overall project costs by moving up the completion timeline. The company said it ended the quarter with $15.7 billion in liquidity.
