As the COVID War still rages and nation and states impose a laundry list of draconian travel/quarantine regulations, airline profits are crashing.
Delta Air Lines burned through $18 million every day in September and will continue to bleed cash into next spring, said CEO Ed Bastain.
Delta has fired 18,000 workers; another 40,000 have opted for unpaid leave. Workers who remain have seen their work hours cut back. The cuts reduced salary costs by 30 percent during the third quarter, the carrier said.
“The virus has had a much broader impact over the course of the year than any of us were suspecting,” Bastain admitted.
Delta had specialized in serving business travelers, leaving the company especially hard-hit when business travel virtually stopped last spring.
However, the airline had spent years paying down debt and has mothballed older jets, leaving it with $22 billion in liquidity at the end of the third quarter. It also has delayed the purchase of new planes, which Delta says will save it $5 billion through 2022.
Delta reported a net $5.4-billion loss in the third quarter, compared with $1.5 billion in profits a year earlier. Sales were down 76 percent, year on year, to $3.1 billion.
United reported a quarterly loss of $1.8 billion for the period, restraining the deficit by flying less than its competitors, said CEO Scott Kirby. The loss compares to a profit of $1 billion in 2019’s third quarter.
On an adjusted basis, the loss was $2.4 billion or $8.16 a share, worse than the $7.53 average expected among analysts polled by FactSet, a research firm.
United reported ticket sales of $2.5 billion for the quarter, 78 percent below those a year earlier.
About 9,000 United employees have retired, been bought out, or take extended leaves without pay.
The carrier has raised about $22 billion during the shutdown, partly by mortgaging its frequent flyer program.
TRENDPOST: Mr. Bastain’s statement that the “virus has had a much broader impact over the course of the year than any of us were suspecting” illustrates both the narrowmindedness of his thinking and the lack of trend forecasting professionals within the organization that understood how the current events were forming future trends.
His “any of us” indicates a very narrow reach of those in charge, and, as trend forecasters, we had forecast since the onset of the COVID War that the travel industry would sink to “Greatest Depression” levels of socioeconomic despair.
Furthermore, Bastain blames the “virus” for the creating the economic disaster rather than identifying the true killers of the industry: the politicians that locked down the global economy.
