Delta books first-quarter loss after burning $100 million in cash a day during coronavirus travel slump

Delta Air Lines‘ on Wednesday posted a pretax loss of $607 million for the first quarter and issued a bleak forecast for this spring as the coronavirus saps travel demand.

The Atlanta-based carrier’s revenues plunged 18% in the quarter to $8.6 billion. CEO Ed Bastian said second-quarter revenue will likely fall 90% on the year.

Airlines are among the industries hit hardest by coronavirus and harsh measures to stop it from spreading, like stay-at-home orders. Carriers including Delta were granted a portion of $25 billion in government grants and loans dedicated to paying employees through Sept. 30.

On an adjusted basis, Delta reported a per-share loss of 51 cents, compared with analysts’ estimates for a 70 cent per-share loss in the first quarter. Delta shares were up 2.6% in premarket trading.

The airline spent the quarter shoring up cash and slashing expenses to combat the sharp drop in revenue. It burned through $100 million a day at the end of March, a rate it expects to halve by the end of the second quarter.

Delta raised $5.4 billion since the end of March, including a $3 billion term loan and $1.2 billion from aircraft sale leasebacks. It also drew down $3 billion of an existing credit facility and cut planned capital expenditures by the same amount.

“The decade of work we put into the balance sheet to lower debt and build unencumbered assets has been critical to our success in raising capital and we expect to end the June quarter with approximately $10 billion in liquidity,” Delta’s CFO Paul Jacobson said in a release.

Delta said it expects to get about $5.4 billion in the government payroll aid — $3.8 billion in grants and a $1.6-billion unsecured 10-year loan. It received the first installment on Monday. The $2.2 trillion in coronavirus relief Congress passed last month sets aside a separate $25 billion in loans for airlines. Delta said it considering applying and that it is likely eligible for about $4.6 billion.