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Delta Lowers Costs To Cope With Two Lean Years

(New York) The American company Delta, now resigned to the idea of ​​facing at least two lean years like the rest of the aviation industry, is trying to cut costs and hopes for a new impetus from the government to avoid massive layoffs.

Posted October 13, 2020 at 2:22 PM

Julie CHABANAS
Agence France-Presse

"While there is still a long way to go, […] we see gradual improvements in our business, which is performing well in the factors we control," said Ed Bastian, CEO of Delta Air Lines. , Tuesday during a conference call.

Above all, consumers seem to have increasing confidence in the idea of ​​taking a plane in the middle of a pandemic, which should allow the industry to gradually lift its head out of the water.

"As the holiday season approaches, we are delighted with the Thanksgiving (Nov. 26, editor) and Christmas booking trends," said the group's number two, Glen Hauenstein, during the same conference call.

But a return to normal is not expected for at least two years, he warned.

Delta, the largest US airline by number of passengers carried, began its third-quarter financial season for airlines on Tuesday.

And reported a heavy loss of $ 5.379 billion, barely less than the loss of 5.7 billion in the second quarter, when much of the world's population was forced to stay at home to stop the spread of COVID-19 .

In terms of revenue, at $ 3 billion, this is only a quarter of that of the third quarter of 2019.

The stock fell on Wall Street in the middle of the session, losing 2.39% to $ 31.86 .

"Fortunate not to have fired"

To cope with these headwinds, Delta Air Lines increased its cash flow, adding $ 21.6 billion in liquidity at the end of September to 15.7 billion at the end of June.

Delta has indeed managed to reduce its daily expenses somewhat, to $ 24 million a day for the quarter, from $ 27 million in the previous quarter. The goal is to halve them again, to reach 10 or 12 million a day by December.

In particular, between the beginning of June and the end of September, the company saved the parking and maintenance costs of the 100 aircraft that were withdrawn from the fleet, while many of the aircraft had been grounded since March.

In addition, approximately 18,000 Delta employees left the group as part of a voluntary departure plan, which reduced personnel costs by 32% compared to the third quarter of 2019.

"We are lucky that we have so far should not have fired so far, ”said Ed Bastian.

But the company has already warned it could split up with 1,700 pilots on November 1 if it fails to reach an agreement with their union. [19659004] From July to September, Delta also received $ 701 million in aid from the US government.

But, like its competitors, it remains to be seen whether their new government aid will be granted. This is not controversial in principle, but three weeks before the presidential election is now the topic at the center of tense discussions between the Trump administration and elected Democrats in Congress.

Republicans support independent aid v By the industry, Democrats don't want to hear about it outside of a bigger plan.

Without it, the airline industry threatens to cut tens of thousands of jobs, casting a shadow over the economic image of Donald Trump, a candidate for re-election and left in the polls by his Democratic competitor Joe Biden.

The chairman of the Republican Senate on Tuesday announced a vote on the stimulus package ahead of the November 3 elections.

United Airlines will announce its results Wednesday, ahead of American Airlines and Southwest next week.

Written by Rahis

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