Delta said it is spending $ 50 million in cash every day and plans to significantly reduce traffic would mean it will need a smaller network and fleet of planes in the coming years. The carrier also said it has refunded more than $ 1.2 billion in customer fares since the start of the pandemic, including 160 million payments so far this month.“The board of directors of May 13, 2020 authorized a plan of retirement of our Boeing 777 and their decommissioning by the end of 2020”, indicated the company in a file to the Securities and Exchange Commission. “We have also previously determined to expedite the withdrawal of our MD-90 aircraft, which will leave the fleet from June 2020.”
“These decisions are intended to better align our network with the drop in passenger demand resulting from the COVID-19 pandemic, to streamline and modernize our fleet, and to generate savings,” said the company.
Delta shares fell 8.3% early in the session Thursday after the update to change hands to $ 17.70 each, a move that would extend the action’s fall from the start by 70%.
Boeing shares fell 6.1% to $ 114.03 each, shifting its six-month decline to around 70%.
“With the unprecedented decline in travel demand in the context of the COVID-19 pandemic and the global economic downturn, we continue to take steps to protect Delta’s cash, jobs and future,” said said CEO Ed Bastian in a letter to staff. “Our main financial objective for 2020 is to reduce our consumption of cash to zero by the end of the year, which will mean, for the next two to three years, a smaller network, fleet and operation in response at a greatly reduced customer demand. “
The lobby group of the International Air Transport Association, known as IATA, said last month that global airline passenger volumes for the month of March fell to the lowest levels since 2006, with revenues down 52.9% from the same period last year.
Freight traffic has decreased by 15% from the previous year, noted IATA, and is expected to be between 14% and 31% for 2020 as a whole,
IATA also warned that even as countries around the world lift travel restrictions as the number of coronavirus cases decreases, demand is expected to remain subdued for several months and the industry is expected to face a loss of 314 billion dollars in revenue that could cost some 25 million industry-related jobs.