Tough times continued for U.S. airlines last quarter, as air travel demand remained severely depressed due to the COVID-19 pandemic. Delta Air Lines (NYSE:DAL) isn't waiting to fill shareholders in on just how bad the quarter was. The airline giant plans to release its Q3 earnings report on Tuesday morning, near the beginning of earnings season.

Here's what investors should pay attention to in the upcoming report.

Cash burn trajectory

Analysts expect Delta to post an adjusted loss of $3.08 per share on about $3.1 billion of revenue in the third quarter. However, cash burn is what investors should really focus on.

Delta Air Lines dramatically slowed its cash burn during the second quarter. After entering April burning about $100 million a day, it reduced daily cash burn to around $27 million in June. Management's goal has been to get to cash breakeven (or thereabouts) by the end of 2020.

Unfortunately, it has been a lot tougher to slow the outflow of cash in recent months. During Delta's Q2 earnings call, management said that July cash burn was likely to be similar to its June performance. At an investor conference in early September, CFO Paul Jacobson indicated that daily cash burn was still hovering around the $27 million level. As he explained, there isn't much room for incremental cost cuts. Ticket sales will need to improve to get Delta the rest of the way to cash breakeven.

A Delta Air Lines plane parked on the tarmac

Image source: Delta Air Lines.

It will be interesting to see where cash burn ultimately landed last quarter, as well as management's commentary on expected Q4 cash flow trends. On the one hand, TSA passenger throughput has averaged just a third of 2019 levels in recent days. On the other hand, demand is creeping slowly but steadily higher. It's certainly plausible that ticket sales for key holidays like Thanksgiving, Christmas, and New Year's could drive a significant sequential improvement in cash burn this quarter.

Any clarity on fleet plans?

Over the course of 2020, Delta has announced aggressive moves to retire older planes and simplify its mainline fleet. It has already retired all of its MD-88s, MD-90s, and 737-700s, as well as a handful of Boeing 767-300ERs and Airbus A320s: a total of 104 aircraft. Its fleet of 18 Boeing 777s will be retired at the end of this month. Most recently, Delta announced that it will retire its remaining 49 767-300ERs as well as its 91 717s by the end of 2025. Many of its remaining A320s and 757s are ripe for retirement over the next five years, too.

Meanwhile, Delta has been aggressive in deferring deliveries of planes it doesn't need right now. However, as of its second-quarter earnings call, it hadn't yet reached a comprehensive agreement with Airbus to restructure its order book, creating a huge amount of uncertainty about future capital expenditures.

With hundreds of planes being retired between 2020 and 2025, Delta will clearly have substantial replacement needs over the next few years. Investors should look for any additional disclosures related to how it's thinking about the timing of deliveries and whether the full-service airline expects to place any new aircraft orders soon.

Can Delta quantify its long-term savings?

Finally, investors should keep their eyes open for any new details on the long-term savings that management expects from various restructuring moves implemented this year.

Between the early retirement of 17,000 employees, the massive fleet simplification effort described above, and other moves to trim spending, Delta has unlocked what could be billions of dollars of annual savings. That savings will be crucial to Delta's future profitability, especially in light of management's acknowledgement that high-fare business travel may never return to pre-pandemic levels.

So far, the company hasn't quantified the long-term savings it expects. Any additional information on that front would help investors understand how quickly Delta's profit might recover as demand rises to more normal levels over the next few years.