“Growth has stalled" .... surge in US infections hits Delta

Delta Air Lines lost $5.7 billion during a brutal three-month stretch in which the coronavirus pandemic brought travel to a near standstill, and any hoped-for recovery has been smothered by a resurgence of infected Americans.

“Growth has stalled,” Delta CEO Ed Bastian said. “It was growing at a pretty nice clip through June. The virus, unfortunately, was also growing.”

Bastian said it will take more than two years for the airline to make “a sustainable recovery” from the virus and the harm it is doing to the global economy.

Delta is the first U.S. airline to report financial results for the May-through-June quarter, and the numbers were ugly.

Passengers boarding Delta planes tumbled 93% from a year earlier, revenue plummeted 88%, and the company’s adjusted loss was worse than anticipated.

Airlines are expected to furlough thousands of workers when federal aid to help cover payroll expenses runs out on Oct 1. Bastian held out hope that Delta might avoid those cuts because 17,000 of its employees have accepted early retirement, and another 35,000 will be taking unpaid leave during July.

The most important financial measure in the airline business right now is cash burn, which determines how long carriers can keep flying while travel remains severely depressed. Delta has about 19 months worth of cash and short-term investments at its current burn rate of $27 million a day.

Back in March, Delta was blazing through nearly $100 million a day. Since then, it has persuaded 40,000 employees to take unpaid leave and it parked hundreds of planes to save money on fuel and maintenance.

What’s missing now are passengers willing to buy a ticket.

“Our goal is to get to break-even by the end of the year, but it’s clearly dependent on the virus starting to be...