Delta reports hefty loss as COVID-19 clouds outlook

Despite aggressive cost-cutting moves, Delta Air Lines reported a hefty loss Tuesday and said the timing of a full industry recovery remained clouded by the coronavirus pandemic.

The big US carrier has steadily worked to reduce its daily cash-burn, but still suffered a $5.4 billion loss in the third quarter following a 76 percent plunge in revenues to $3.1 billion.

Company officials said they had seen some positive booking momentum heading into the holiday season, but a real recovery depends on a comeback in business travel and the end of travel quarantines for Covid-19.

Some industry officials say a full recovery could take two years or more.

"That will only come with widespread advances by the medical community and offices reopening, which many expect will start to happen in the first half of next year," said Chief Executive Ed Bastian.

Bastian said he was confident that business travel would resume in the long-term, but perhaps at a 10 to 20 percent lower level due to Zoom and other technologies that allow for remote meetings.

He remained confident that gloomy forecasts will again be proven off-base since in the past "business travel has come back stronger than anyone anticipated," he said.

The company is working with authorities to allow for more rapid coronavirus testing at airports with the goal of eliminating the need for travelers to quarantine upon entry, he said.

Delta has avoided mass layoffs announced by competitors American and United Airlines, as voluntary retirements and furloughs have allowed it to lower daily cash burn to $18 million in September from $100 million in March.

But Delta has roughly 1,700 pilots more than it needs and will undertake furloughs in November if no deal is reached with the pilots union.

United Airlines last month reached an agreement with its union to avert furloughs, which involved cutting hours.

Delta shares fell 1.9 percent to $32.03 in afternoon trading.