Delta Air Lines swings to a net loss of £4.57 billion in Q2 as COVID-19 weighs on demand

Delta Air Lines (NYSE: DAL) published its quarterly financial results on Tuesday that highlighted a net loss of £4.55 billion in the second quarter. The loss marked the largest for Delta since the market crash of 2008.

Shares of the company were reported about 1% down in premarket trading on Tuesday. At £21.27 per share, Delta Air Lines is more than 50% down year to date in the stock market. Learn more about how to invest in the stock market.

Delta Air Lines’ Q2 financial results versus analysts’ estimates

According to FactSet, analysts had anticipated the company to print £1.11 billion in revenue in the second quarter. Their estimate for loss per share was capped at £3.32. In its report on Tuesday, Delta Air Lines posted a higher £1.17 billion in revenue in Q2 but a weaker than expected £3.54 of adjusted loss per share. Fitch Ratings downgraded Delta to junk in April.

The airline swung to a net loss of £4.57 billion in the second quarter versus £1.15 billion of net income in the same quarter last year. On a year over year basis, its revenue also came in lower than the year-ago figure of £10.02 billion. Delta’s CEO issued last call to the staff for voluntary buyouts last week.

Other prominent figures in Delta’s financial results on Tuesday include a 94% and a 42% decline respectively in passenger revenue and cargo revenue.

The Atlanta-based company said it had £12.54 billion in liquidity at the end of the recent quarter and £19.65 billion of finance lease obligations and total debt. It also gained access to £4.31 billion under the government’s CARES act. Delta’s investments in LATAM Airlines, AeroMexico, and Virgin Atlantic resulted in an £880 million, £615 million, and £160 million write-downs respectively in the second quarter.

Delta Air Lines minimises daily cash burn to £21.57 million

In its previous statement, the U.S. air carrier had hoped to expand its flights next month by 1,000 per day. On Tuesday, however, it said that it will only target adding 500 a day now in August as the rising COVID-19 cases continue to weigh on demand for air travel.

In late March, Delta Air Lines had reported £79.88 million of cash burn per day. By the end of last month, it boasted to have been successful in minimising its cash burn to only £21.57 million a day. The U.S. airline is committed to breaking even before the start of 2021.

At the time of writing, Delta Air Lines is valued at £13.67 billion and has a price to earnings ratio of 4.98.