The majority of the loss stemmed from the Atlanta-based airline's efforts to slim down its workforce as the virus-induced crisis cratered demand, including a $3.1 billion charge for voluntary separation and early retirement programs and a $2.2 billion restructuring charge.
But a 32% drop in labor costs led to a $1.3 billion surplus in federal funds that Congress allocated in March to help airlines preserve jobs for six months.
|DAL||DELTA AIR LINES, INC.||39.90||-1.33||-3.23%|
|UAL||UNITED AIRLINES HOLDINGS, INC.||46.72||-1.77||-3.65%|
|AAL||AMERICAN AIRLINES GROUP, INC.||20.38||-0.79||-3.73%|
“We’ve stretched those dollars out,” Delta’s CEO, Ed Bastian, told Reuters. Bastian said the company can use the money in the fourth quarter, in addition to any other stimulus passed by Congress if lawmakers extend the $25 billion Payroll Support Program for another six months.
For months, Congress has struggled to reach an agreement on additional stimulus. Although Democrats and Republicans broadly agree that another bill is necessary to aid the economy's recovery, they sharply disagree over the size and scope of it. House Speaker Nancy Pelosi has rejected a standalone bailout for the airlines without a broader stimulus deal in place.
Unlike two of its biggest rivals -- United and American -- Delta has avoided furloughing flight attendants and other frontline workers. Still, it could lay off about 1,700 pilots on Nov. 1 without additional aid or a union agreement.
Delta's loss compared with a year-ago profit of $1.5 billion and nearly matched the loss of $5.7 billion in the second quarter, when the pandemic brought air travel to a near standstill. Since then, Delta has concentrated on hoarding cash — it raised $9 billion by mortgaging its frequent-flyer program — and cutting costs.
The airline reduced its cash-burn rate to $18.4 million a day in September from $26.1 million in July and August, and Bastian predicted it could reach break-even cash flow by spring. Investors are watching cash as a gauge for how long carriers can last in the industry’s current depressed state.
Delta is the first U.S. airline to release third-quarter numbers. United Airlines is scheduled to release its results Wednesday, and analysts expect another large loss.
The Associated Press contributed to this report