LONDON – In the carrier’s third-quarter financials, Delta Air Lines (DL) has today laid out the foundations for aircraft it will be retiring over the next three years.
It is understood that between June 2020 to December 2025, 383 aircraft will be retired from the fleet. They are as follows:
- MD-90 – 26 aircraft retired in June 2020.
- Boeing 767-300ER – Seven retired in June 2020.
- Airbus A320 – 10 retired in June 2020.
- MD-88 – 47 retired in June 2020.
- Boeing 737-700 – 10 retired in September 2020.
- Boeing 777 – 18 to be retired in December 2020.
- Bombardier CRJ200 – 125 to be retired in December 2023
- Boeing 717 – 91 to be retired in December 2025.
- Boeing 767-300ER – 49 to be retired in December 2025.
The airline was also keen to note that Airbus and CRJ order books have been restructured to better match the timing of aircraft deliveries with network and financial needs. Aircraft purchase commitments were reduced by more than US$2bn this year, with the number expected to rise to US$5bn by 2022.
Commenting on the fleet retirements as well as the negative financial reports was DL’s CEO Ed Bastian who explained that the results demonstrated “the magnitude of the pandemic” on the business.
“While our September quarter results demonstrate the magnitude of the pandemic on our business, we have been encouraged as more customers travel and we are seeing a path of progressive improvement in our revenues, financial results and daily cash burn.”
“The actions we are taking now to take care of our people, simplify our fleet, improve the customer experience, and strengthen our brand will allow Delta to accelerate into a post-COVID recovery.”
Delta Air Lines posted a pre-tax loss of US$2.6bn, which excludes US$4bn worth of items related to the impact of COVID-19 including the company’s response to the pandemic.
At the end of September, the airline had US$21.6bn in liquidity and is currently burning around US$24m per day, although this was at US$18m per day for the month of September.
Revenue down Nearly 80%
Revenue at the carrier dropped by 79% compared to the same period last year, recording around US$2.6bn in Q3 alone. Passenger revenues were the items that declined the most, which was an 83% decrease in 63% lower capacity. Commenting on this was Delta’s President Glen Hauenstein who explained why this decrease had occurred.
“With a slow and steady build in demand, we are restoring flying to meet our customers’ needs, while staying nimble with our capacity in light of COVID-19. While it may be two years or more until we see a normalized revenue environment, by restoring customer confidence in travel and building customer loyalty now, we are creating the foundation for sustainable future revenue growth.”
At the end of Q3, DL recorded a total debt and finance lease obligation of US$34.9bn, of which adjusted net debt was recorded at US$17bn. This is US$6.5bn higher than in the same period last year.
Under the much controversial CARES Act, the airline received around US$701m under the payroll support program (PSP). It is currently controversial as the US Congress has not passed any level of extension into PSP as of yet.
A Multitude of Changes
For DL, these Q3 results have highlighted that a multitude of things at the airline has changed. First of all, with the airline releasing its retirement schedule, it means that further financial steps are being taken in order to keep the fleet simplified and cheap, especially during a global pandemic.
With next-generation aircraft such as the Airbus A350 and the A321neo hitting the doorsteps of DL, it means that the far older aircraft will now have its retirement dates set as seen today. It will be interesting to see how Delta will now handle its finances going towards the end of the year and whether any level of recovery can be made quicker than it predicts.
Featured Image: Delta Air Lines Boeing 767-300ER. Photo Credit: Luca Flores