Delta Air Lines is removing 400 aircraft from nine different models from its fleet

Delta Air Lines released its financial results for the quarter ended September 2020 on Tuesday (13th). It contained a billion dollar loss and some surprising news that indicated a fleet reduction of about 30% in a 5-year period – the percentage was calculated for the company’s own fleet, regional businesses, and supplies originally for the years were planned.

“Although our results for the September quarter demonstrate the extent of the pandemic in our business, we have been encouraged as more customers travel and we see a path of incremental improvement in our earnings, financial results and daily cash use,” said Ed Bastian, Delta CEO. “The actions we are now taking to take care of our people, simplify our fleet, improve customer experiences and strengthen our brand will enable Delta to accelerate a recovery from COVID.”

Financial results

The company reported an adjusted pre-tax loss of $ 2.6 billion, which excludes $ 4.0 billion worth of stocks directly related to the impact of COVID-19 and the company’s response, including the cost of restructuring the fleet and the cost of voluntary retirement and retirement programs, which were partially offset by the quarterly recognized CARES Law Grant.

Total adjusted revenue of $ 2.6 billion was 79 percent lower than the same period last year, while capacity was 63 percent lower. However, at the end of the quarter, the company had $ 21.6 billion of immediate cash and cash equivalents (cash and loans).

Basis for restoration

Delta has taken a number of steps to position the company to accelerate towards a recovery from COVID:

Take good care of the Delta people

– Through voluntary termination and early retirement programs, unpaid voluntary leave, division of labor and other initiatives, the company has avoided involuntary leave for ground workers and flight attendants.

– Launch a “Stop the Spread, Save Lives” campaign to highlight the top six health measures Delta employees are taking to protect against COVID-19, including wearing masks, social distancing, testing and getting a flu shot. Delta offers free COVID-19 tests and flu vaccines to its employees in the United States.

Enhance the customer experience

– Highlighting health and safety with Delta CareStandard, a layered approach that includes intensive cleaning protocols, intermediate seat blocking and the requirement of masks on board all aircraft.

– Reduced complexity for customers, elimination of change fees for almost all domestic tariffs.

– A customer-centric approach to refunds with a return of approximately $ 2.8 billion year-to-date.

Simplification of the fleet

– Restructuring of the Airbus and CRJ aircraft order portfolios to better align aircraft delivery times in the coming years to the network and financial requirements. The restructuring will reduce aircraft purchase commitments by more than $ 2 billion in 2020 and by more than $ 5 billion by 2022

– Accelerating the Fleet Simplification Strategy, which aims to modernize and streamline the company’s fleet, improve the customer experience and achieve cost savings. The company announced plans to accelerate the decommissioning of nearly 400 aircraft by 2025, with more than 200 in 2020. That figure represents 30% of all aircraft, including the regional companies that serve them.

See the list below for the 9 models that will be removed or reduced.

In conclusion, in the next five years we should see a Delta Air Lines that is very different from today’s, with fewer aircraft models and more lean. The only salvation for such an impact would be a rapid recovery of the economy and the travel market in “V”, which the forecasts do not currently show.

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