Delta Air Lines CEO Ed Bastian revealed to employees that the airline now expects revenue to plunge $10 billion in the second quarter of this year — or an 80% decline compared to last year — as the airline deals with the economic fallout from the coronavirus pandemic.
"It's also clear, given the underlying damage the virus has created to the overall economy, that demand recovery will take an extended period once the virus is contained," he said in a letter to employees, obtained by CNN.
Delta arranged for $2.6 billion in new borrowing and drew down an additional $3 billion in cash on an existing credit line, Bastian revealed. And he said about 13,000 of more than 90,000 Delta employees had agreed to take voluntary unpaid leaves.
He also defended past spending by the company, saying that most of the profits in recent years went into new aircraft and employees, not to share repurchases or dividends that benefit shareholders.
Earlier this week, Bastian wrote another letter to employees in which he said the airline would cut 70% of it scheduled flights and that it would park 600 of its jets, more than half of its fleet. He also warned that involuntary furloughs or pay cuts might be necessary.
"I know everyone is concerned about the security of your jobs and pay. Given the uncertainty about the duration of this crisis, we are not yet at a point to make any decisions," he wrote on Wednesday. "And those are very painful decisions to even consider. In this unpredictable environment we can't take any options off the table, but any steps that would affect your jobs or pay rates would be the absolute last thing we would do, and only if necessary to secure Delta's long-term future."
