Delta Air Lines will post its first-quarter 2020 results on Wednesday, and no one expects it to be anything other than grim reading.
This year has been devastating for the travel sector and airlines, in particular, seeing multiple carriers ground their entire fleet following government orders to contain the coronavirus pandemic. With air-travel demand near zero and strict restrictions on travel, Delta Air Lines’ revenues are expected to have fallen like a stone.
Notably, the Zacks Consensus Estimate for first-quarter passenger revenues indicates a 6.3% fall from the figure reported in fourth-quarter 2019. Additionally, the consensus mark implies a 2.9% dip in total revenues for the soon-to-be-reported quarter. Delta, led by chief executive Ed Bastian, has an earnings per share of -37.65% as the Most Accurate Estimate is pegged at a loss of 70 cents, wider than the Zacks Consensus Estimate of a loss of 51 cents.
Following US President Donald Trump’s announced relief package, airline executives have expressed concern and confusion about the details of the government aid. A few have pointed out that having to repay the loan may prove to be more difficult for airlines – with revenue losses estimated at $314bn for the industry since the coronavirus outbreak.
Moreover, weak cargo demand due to global supply-chain disruptions is expected to hit its cargo revenues.
On Monday, rival United said it expects to report a pre-tax loss of about $2.1bn for the first quarter, as demand plummeted due to the health crisis. The carrier said it expects to borrow up to about $4.5bn from the US Treasury Department for a term of up to five years. This cash comes on top of $5bn that the group will receive from a separate government aid package specifically for its employee payroll. The last of the country’s Big Three airlines, American Airlines, reports on Friday.