Airlines

Delta warns of slowing bookings, higher cash burn as Covid infections climb

Key Points
  • Other carriers also have warned investors about weakening demand due to the rise in infections.
  • Delta CEO Ed Bastian said weaker bookings are adding about $2 million in daily cash burn.
  • But he expects the carrier to break even by spring.

In this article

Delta Air Lines Airbus A330 aircraft as seen on final approach in Amsterdam Schiphol International Airport in the Netherlands.
NurPhoto | NurPhoto | Getty Images

Delta Air Lines said Thursday that a spike in coronavirus infections is hurting demand for air travel, becoming the latest airline to warn about softening bookings as the pandemic intensifies.

"We've always said this was going to be a choppy recovery, and that's been true in recent weeks — like others in the industry, we've seen some slowing of demand and forward bookings as COVID cases have risen across the U.S.," CEO Ed Bastian said an employee memo.

Bastian said the weaker bookings are adding about $2 million in daily cash burn and that it now expects to go through $12 million to $14 million a day in the fourth quarter, up from a previous forecast for $10 million to $12 million.

The carrier is "still on track" to break even by spring, an estimate that has "been bolstered by continued positive developments with vaccines," Bastian said.

United Airlines, American Airlines, Southwest Airlines and JetBlue Airways have also warned about slowing bookings because of the rise in new infections. According to Johns Hopkins University data, the seven-day average of daily new cases is 164,103 in the U.S. and hospitalizations and deaths have hit record levels.

Delta said it continues to expect its fourth-quarter revenue to come in at 30% of its fourth-quarter 2019 sales.

Delta shares rose 4.6% Thursday to $42.95.

Airlines prepare to get customers ready to fly 737 Max
VIDEO5:1105:11
Airlines prepare to get customers ready to fly 737 Max