Cash burn halved

Delta Air Lines said on Thursday it halved its cash burn and reduced its fourth-quarter losses as the coronavirus pandemic propelled the airline into its worst year on record.

The Atlanta-based airline posted a net loss of nearly $ 12.39 billion in 2020 – a record according to data from FactSet.

Here’s how Delta performed in the quarter, compared to what Wall Street expected, based on average estimates compiled by Refinitiv:

• Adjusted Earnings Per Share: A loss of $ 2.53 versus an expected loss of $ 2.50
• Total Sales: $ 3.97 billion vs. projected $ 3.59 billion in revenues

Delta fluctuated to a net loss of $ 755 million in the fourth quarter, compared to a profit of $ 1.1 billion a year earlier. Total revenue declined 65% from $ 11.44 billion in the fourth quarter of 2019 to $ 3.97 billion. The company’s revenue was boosted by $ 441 million from the sale of third-party refineries. On an adjusted basis, Delta had a loss per share of $ 2.53, compared to analyst estimates of a loss of $ 2.53 per share.

The carrier’s cash burn averaged $ 12 million per day for the quarter ended December 31, down by half from the average cash burn of $ 24 million per day in the third quarter. Delta has said it expects cash flow to be positive in the spring.

Delta shares rose 1.5% in premarket trading after Delta reported results.

The airline will face difficult months, but sees a recovery in 2021 as Covid-19 vaccines are administered across the country, CEO Ed Bastian said.

“As our challenges continue into 2021, I am optimistic that this will be a year of recovery and a turning point that will result in an even stronger Delta returning to revenue growth, profitability and free cash generation,” said Bastian.

Delta said it expects revenues to fall 60% to 65% in the first quarter of the year, compared to the same period a year earlier, just as the pandemic started. That’s lower than analyst estimates for a 48% year-on-year decline.

The pandemic devastated travel demand due to concerns about the virus, quarantines, travel restrictions and business travel interruptions, leaving millions of potential customers at home. The Transportation Security Administration screened just 324 million travelers last year, up from 824 million in 2019.

Airline executives hoped the introduction of vaccines would provide some relief, but have repeatedly warned that it will not happen immediately.

“The first part of the year will be characterized by a choppy recovery in demand and a booking curve that remains compressed, followed by a tipping point and finally a continued recovery in demand as customer confidence builds, vaccinations become widespread and offices reopen “. Delta’s president Glen Hauenstein said in an earnings release.

Delta said it closed the fourth quarter with $ 16.7 billion in liquidity. Delta raised billions in debt last year, including record sales of $ 9 billion in debt, supported by its frequent flyer program SkyMiles.

The airline and its rivals are also receiving additional federal funds to help weather the crisis. Congress approved $ 15 billion in additional federal aid for airlines to pay workers late last year, on top of an additional $ 25 billion in government payroll they received under the March CARES Act.