Delta Air aims 50pc cut in daily cash burn by end-June
DELTA Air Lines Inc says it will reduce its daily cash burn by half by the end of June amid a collapse in travel demand
DELTA Air Lines Inc says it will reduce its daily cash burn by half by the end of June amid a collapse in travel demand.
The company will be going through only US$50 million a day when the second quarter draws to a close, chief financial officer Paul Jacobson said in a statement. The figure was $100 million at the end of the first quarter, reported AJOT.
Delta has parked 650 aircraft, cut flying capacity 85 per cent this quarter, frozen hiring and lowered executive pay to save money. Some 37,000 employees - one third of Delta's workforce - have agreed to take short-term leave without pay.
'These are truly unprecedented times for all of us, including the airline industry,' chief executive officer Ed Bastian said in the statement. 'Government travel restrictions and stay-at-home orders have been effective in slowing the spread of the virus, but have also severely impacted near-term demand for air travel.'
Sales in the first quarter of this year tumbled 18 per cent to $8.59 billion.
The Atlanta-based airline raised $5.4 billion in capital since early March, including a $3 billion secured term loan and $1.2 billion in aircraft sale leaseback agreements. Delta will receive another $5.4 billion in payroll support from the US Treasury Department, including a $1.6 billion unsecured loan for which the government will receive warrants for 6.5 million shares of company stock.