Cargo has been a bright spot for Delta Air Lines (NYSE: DAL), but the revenue from this business is still part of a $3.9 billion pretax loss for the second quarter.
Like other airlines, Delta in March shifted some passenger planes to cargo-only flights to carry personal protective medical gear and other high-demand products overseas to key U.S. markets. It also has made use of passenger quarters on some planes to handle certain cargoes.
Despite the cargo-only flights, the airline reported cargo revenue of $108 million for the second quarter, a drop of 42% compared to the same period last year.
At one point, Delta was operating 124 cargo-only flights per week.
Delta, however, continues pulling out all the stops to steady its finances during the coronavirus-induced crisis besetting the aviation industry.
CEO Ed Bastian said it could be two years or longer for international airlines to see a financial recovery that includes the gradual return of business and leisure travel.
With only about 30%-35% of Delta’s passenger aircraft fleet flying during the summer months, shippers and their freight forwarders have limited options for airfreight transport.
Bastian said the heavy uptake of buyout packages and early retirements should stave off additional furloughs.
In addition to the $1.3 billion CARES Act funding from Congress and significant reduction in “cash burn,” Delta raised nearly $15.7 billion in capital during the quarter.
“By raising cash early and aggressively managing costs, we are prepared to navigate what will be a volatile revenue period while making decisions that position Delta well for the eventual recovery,” Delta Chief Financial Officer Paul Jacobson said in a statement.
However, Bastian told industry analysts on a Tuesday morning conference call that the airline’s “revenue environment remains challenging.”
Delta’s total second-quarter revenue reached about $1.5 billion, down 88% compared to the prior year, with total unit revenue down 21%.
Bastian said he expects Delta to be a nimble airline post-COVID-19. The airline is pressing ahead with retiring more than 100 planes, including Boeing 777 and 737-700 fleets and a portion of its B767-300ER and Airbus A320 fleets in 2020. Delta also canceled its purchase commitment for four A350 planes from troubled LATAM Airlines.
Bastian said the health and safety of employees and passengers is Delta’s top priority, and he made a pitch to coveted business travelers that services are “not only safer but better.”