Cash burned in half

Delta Air Lines said on Thursday it had halved its cash burn with the loss in the fourth quarter as the coronavirus pandemic drove the carrier to its worst year ever.

The Atlanta-based airline posted a net loss of nearly $ 12.39 billion in 2020, according to FactSet data.

Here’s how Delta performed in the quarter, compared to what Wall Street expected, based on average estimates compiled by Refinitiv:

• Adjusted earnings per share: a loss of $ 2.53 versus an expected loss of $ 2.50
• Total revenue: $ 3.97 billion versus expected $ 3.59 billion in revenue

Delta posted a net loss of $ 755 million in the fourth quarter, compared to a profit of $ 1.1 billion a year earlier. Total revenue fell 65% from $ 11.44 billion in the fourth quarter of 2019 to $ 3.97 billion. The company’s revenue received a $ 441 million boost through third-party refinery sales. On a adjusted basis, Delta had a loss of $ 2.53 per share, compared to the analysis estimates for a loss of $ 2.50 per share.

The air carrier’s cash burn averaged $ 12 million a day in the quarter ended December 31, down from half the average cash burn of $ 24 million a day in the third quarter. Delta said it expects to be positive with the cash flow by spring.

Delta shares rose 1.5% in pre-trading after Delta reported its results.

The airline will face difficult months, but sees a recovery in 2021 as Covid vaccines are administered across the country, CEO Ed Bastian said.

“As our challenges continue into 2021, I am optimistic that it will be a year of recovery and a turning point that will lead to an even stronger Delta returning to revenue growth, profitability and free cash generation,” Bastian said.

Delta said it expects revenue to decline by 60% to 65% in the first quarter of the year from the previous year, just as the pandemic began. This is worse than analysts estimate that the decline is 48% year-on-year.

The pandemic devastated the travel demand because millions of potential customers stayed home due to the virus, quarantines, travel restrictions and breaks on business trips. The Transportation Security Administration last year selected only 324 million travelers, up from 824 million in 2019.

Managers of airlines were hopeful that the deployment of vaccines would provide some relief, but repeatedly warned that it would not be immediate.

“The early part of the year will be marked by an improper demand recovery and a discussion curve that remains compressed, followed by a turning point, and ultimately a sustained demand recovery as customer confidence gains momentum, vaccinations spread widely and offices reopen, “Delta President Glen Hauenstein said in the release statement.

Delta said the fourth quarter ended with $ 16.7 billion in liquidity. Delta raised billions in debt last year, including a record $ 9 billion debt sale, backed by its regular visitor program, SkyMiles.

The carrier and its competitors are also receiving additional federal funds to help withstand the crisis. At the end of last year, Congress approved $ 15 billion in additional federal aid for airlines to pay workers, in addition to the $ 25 billion in government wage support they received under the March CARES Act.