Delta Air Lines expects its second-quarter revenue to fall by USD 10 billion, representing an 80% reduction compared with a year earlier, the company said, as the coronavirus hurts travel demand.
To beef up its cash position during the crisis, the airline has entered into a USD 2.6 billion secured credit facility and was drawing down USD 3 billion under its existing credit facilities. “We are currently burning roughly USD 50 million in cash each day,” Ed Bastian, chief executive officer of Delta Air Lines said in a memo to employees.
The global travel industry has been upended as tourists stay indoors to stop spread of the highly contagious virus, with some estimates pegging revenue losses for the business travel sector at about USD 820 billion. The carrier has already said it will park more than 600 jets, cut corporate pay by as much as 50% and scale back its flying by more than 70% until demand begins to recover.
“Given the underlying damage the virus has created to the overall economy, that demand recovery will take an extended period once the virus is contained,” he added.