Delta CEO: Business will take 'two to three years' to recover from coronavirus

KEY POINTS

• Delta CEO Ed Bastian said it could take two or three years for the airline's business to recover from the coronavirus. 
• The virus and stay-at-home orders have destroyed almost all demand for air travel.
• The airline posted its first loss in five years in the first quarter.

Edward Bastian, chief executive officer of Delta Air Lines Inc., speaks during an interview in New York, U.S., on Wednesday, Sept. 18, 2019.

Christopher Goodney | Bloomberg | Getty Images

Delta Air Lines CEO Ed Bastian told employees Wednesday that it could take two to three years for the airline's business to recover from the impact of the coronavirus pandemic.

The airline is carrying about 5% of its normal passenger loads, Bastian told CNBC in an interview, as demand for air travel has nearly disappeared because of the virus and measures to stop it from spreading such as stay-at-home orders.

Delta is slashing costs by parking planes, freezing hiring and asking thousands of employees to take unpaid leave as revenue falls. Sales in the second quarter will likely be 90% less than expected, Delta said in a earnings release. Delta reported a net loss of $534 million in the first quarter, its first quarterly loss in more than five years. 

Airlines have been especially hard hit by the coronavirus, which has been whiplash for an industry that had been planning for record numbers of passengers in this and the coming years by increasing staffing and buying new planes.

Bastian warned employees that the airline will be smaller because of what's expected to be a slow recovery.

"We are confident that people will begin to travel again," he told employees in a memo. "We don't know when it will happen, but we do know that Delta will be a smaller airline for some time, and we should be prepared for a choppy, sluggish recovery even after the virus is contained. I estimate the recovery period could take two to three years."

Bastian said he hopes things turn around sooner "but we need to be realistic in our planning."

Airline CEOs have said they do not expect a quick rebound in demand, even though some state governments, including in Georgia, where Delta is headquartered, are exploring reopening some businesses.

United Airlines CEO Oscar Munoz and its president, Scott Kirby, who takes the helm next month, told employees on April 15 that "we expect demand to remain suppressed for the remainder of 2020 and likely into next year."