Generally, weekends provide relief for both people and businesses but Delta is having a bad week (and weekend).
Yesterday, I wrote about a possible COVID-19 coverup from senior officials at Delta that has now gone viral.
Well, according to the Atlanta Business Chronicle, Delta CEO Ed Bastian said the airline is hemorrhaging $60 million per day and “still (hasn’t) seen the bottom.”
He also told employees that second-quarter year-over-year revenue will plummet by 90%. In other words, they are making 90% less than what they made at same time last year.
In a memo to employees, Bastian said the airline submitted its application for rescue aid to the Treasury Department but he warned the funds wouldn’t be enough.
“Without the self-help actions we are taking to save costs and raise new financing, that money would be gone by June,” he said.
Approximately 38,000 people flew Delta last Saturday, compared to normal trends of around 600,000, Bastian said in the memo. Some 30,000 employees (about a third of their workforce) have voluntarily taken unpaid leave. The carrier said that this month, its flight schedule would be at least 80% smaller than initially planned.
Additionally, the airline’s load factor was reportedly just 6.3% of a typical late March Saturday.
And if it couldn’t get worse, Warren Buffet’s Berkshire Hathaway sold almost 13,000,000 shares of Delta (DAL) stock today. Yes, 13 million shares!? Ouch!
Most experts are saying that the US hasn’t even hit the coronavirus peak yet. I don’t want to be an alarmist but this does not sound good.
Delta is arguably the financially strongest airline of the ‘Big US3’ so what does this mean for other airlines?
What do you make of this development?