Delta Air Lines records £491 million of pre-tax loss in the first quarter

The global airline industry has taken the hardest hit from the Coronavirus pandemic. In its announcement on Wednesday, Delta Air Lines (NYSE: DAL) said it saw a massive £491 million of pre-tax loss in the first quarter. The company also gave downbeat guidance for 2020’s spring as the health crisis continues to weigh on the global demand for travel and tourism.

At £6.95 billion, the U.S carrier’s quarterly revenue reported a sharp 18% decline. In the second quarter, as per the chief executive officer, Ed Bastian, revenue is expected to plunge as much as 90% year over year.

Delta Air Lines Records 41 Pence Of Adjusted Loss Per Share

With governments from across the globe resorting to nationwide lockdowns and imposing strict social distancing measures to minimize the spread of the flu-like virus, the global travel industry has been brought to a near halt in recent months. U.S airlines including Delta recently received financing from the U.S government as part of its £20 billion grants that required the U.S carriers to keep its employees on payroll until September 30^th.

Delta Air Lines registered a 41 pence of adjusted loss per share in the recent quarter. Analysts, on the other hand, had forecast an even wider 57 pence of loss for Delta on a per share basis in Q1.

Ahead of the announcement, Delta was seen 3% up in premarket trading on Wednesday.

Delta Was Burning Through £81 Million Per Day In Late March

The U.S carrier focused on preserving cash and slashing expenses in the first quarter to make up for the sharp decline in its revenue. In late March, the company said that it was burning through £81 million per day. It, however, expressed confidence that by the end of Q2, this rate of cash-burn will be down by at least 50%.

Since the end of last month, Delta Air Lines has raised £4.36 billion including a term loan worth £2.42 billion and an additional £970 million from jets sale-leasebacks. The company also withdrew completely from its £2.42 billion existing credit facility and slashed its capital expenditures for 2020 by a similar amount.

At £18.50 per share, Delta Air Lines is currently around 60% down year to date in the stock market. In 2019, on the contrary, the company had recorded an annual gain of around 60%.

At the time of writing, Delta Air Lines is valued at £11.95 billion and has a price to earnings ratio of 3.16.