Delta Air Lines posts December quarter- and full full-year 2020 financial results

Delta Air Lines has reported financial results for the December quarter and full year 2020 and provided its outlook for the March quarter 2021.  

Adjusted pre-tax loss of US$2.1 billion excludes nearly US$1 billion of items directly related to the impact of, and in response to, COVID-19, including charges associated with employee pay and benefit changes, which were offset by the benefit of the CARES Act payroll support program (PSP) grant recognized in the quarter.

Adjusted operating revenue of US$3.5 billion declined 69% on 62% lower sellable capacity versus the prior-year period. Total operating expense, which includes US$930 million of items, decreased US$5.2 billion over the prior-year period.  Adjusted for those items and third-party refinery sales, total operating expense decreased US$4.6 billion or 47% in the December quarter compared to the prior-year period, driven by lower capacity and revenue-related expenses, and strong cost management across the business.

During the December quarter cash burn averaged US$12 million per day, marking an approximate 90% reduction in cash burn since late March. At the end of 2020, the company had US$16.7 billion in liquidity, including cash and cash equivalents, short-term investments, and undrawn revolving credit facilities.

Full Year 2020 adjusted pre-tax loss of US$9.0 billion excludes a net of US$6.6 billion of items primarily related to the impact of, and the response to, COVID-19.

Adjusted operating revenue of US$15.9 billion declined 66% on 61% lower sellable capacity versus the prior year. Total operating expense, which includes US$4.3 billion of COVID- related and other items, decreased US$10.8 billion over prior year.  Adjusted for those items and third-party refinery sales, total operating expense decreased US$16.0 billion or 40% in 2020 compared to the prior year.

For 2021, Delta’s President Glen Hauenstein sees three distinct phases: “The early part of the year will be characterized by choppy demand recovery and a booking curve that remains compressed, followed by an inflection point, and finally a sustained demand recovery as customer confidence gains momentum, vaccinations become widespread, and offices re-open. [For] each phase, Delta has the levers to pull to successfully react to the emerging demand environment, including tightly matching our sellable capacity to expected demand.”