Delta Air Lines makes capacity reductions for June quarter

Major US carrier Delta Air Lines has announced significant capacity reductions for the June quarter as part of efforts to address coronavirus (Covid-19) challenges.

The carrier’s total system capacity is expected to be reduced by 85%, including domestic capacity by 80% and international by 90%.

In its financial results for the March quarter 2020, Delta reported its revenue decreased by 18% compared with last year.

The company had $6.0bn in unrestricted liquidity at the end of the March quarter.

Delta chief executive officer Ed Bastian said: “These are truly unprecedented times for all of us, including the airline industry. 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, reducing our expected June quarter revenues by 90%, compared to a year ago.

“Delta is taking decisive action to prioritise the safety of our employees and customers while protecting our business and bolstering liquidity.”

Last month, the company decided to ground nearly 600 aircraft as passenger operations have collapsed globally due to the pandemic.

Delta also anticipates a reduction in June quarter total expenses by approximately 50% or $5bn, compared to the previous year.

It also offered voluntary leave options with 37,000 employees taking short-term unpaid leave.

Delta chief financial officer Paul Jacobson said: “With the significant impact of Covid-19 on Delta’s revenue, we were burning $100m per day at the end of March. Through our decisive actions, we expect that cash burn to moderate to approximately $50m per day by the end of the June quarter.”