To boost its cash position during the coronavirus crisis, Delta Air Lines (DL, Atlanta Hartsfield Jackson) has entered into a USD2.6 billion secured credit facility and has drawn down USD3 billion under its existing revolving credit facilities, it said in a statement on March 20.
The carrier said it expects its second-quarter revenue to fall by USD10 billion, representing an 80% reduction compared with a year earlier.
To preserve liquidity, Delta has suspended its capital returns programme, including the company’s stock repurchase scheme and the board’s suspension of future dividend payments. It has already said it will park more than 600 aircraft while cutting corporate pay by 50%.
“The growing need to protect Delta’s future has led to difficult decisions across our business that are impacting all of our stakeholders,” said CEO Ed Bastian.
“Maintaining ample liquidity during this crisis is critical to the essential service that Delta provides in America’s transportation infrastructure as well as the jobs of more than 90,000 Delta people across the country,” he added.
“We are currently burning roughly USD50 million in cash each day,” Bastian said in a memo to employees, Reuters reported. “Given the underlying damage the virus has created to the overall economy, demand recovery will take an extended period once the virus is contained.”
The Atlanta-based airline said in a statement on March 21 that it was extending the window in which it will allow passengers to change, cancel, or rebook flights without incurring additional fees for another month, until the end of May. For cancellations, passengers will receive airline credit rather than cash.
