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Delta reports Q1 2020 financial results

Delta reports Q1 2020 financial results

Old Apr 22, 20, 7:57 am
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Delta reports Q1 2020 financial results

https://news.delta.com/delta-announc...sponse-actions

Loss numbers not as bad as I was expecting...

GAAP Pre-tax loss: $607m
Adjusted Pre-tax loss: $422m

GAAP Net Loss: $534m
Adjusted Net loss: $326m

Revenues $8.6 billion, down 18% year over year

Cash burn at end of March: $100m per day
Expected cash burn at end of June quarter: $50m per day

Unrestricted cash and equivalents at end of Q1: $6 billion
Expected liquidity at end of Q2: $10 billion

Over 37,000 of 90,000 employees have volunteered for unpaid leaves.
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Old Apr 22, 20, 8:11 am
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Q1 loss is right in line with most expectations. Q2 is going to be brutal, with $100m being lost every day. Everything seems about what everyone had expected, and they already received their bailout, so stock will probably avoid too much of a beating today.
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Old Apr 22, 20, 8:46 am
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Explains why Delta will not refund two cancelled international flights, as their new business model is also to hold on to customers money despite a warning from the DOT.
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Old Apr 22, 20, 9:21 am
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Originally Posted by DrMilano View Post
Explains why Delta will not refund two cancelled international flights, as their new business model is also to hold on to customers money despite a warning from the DOT.
I received two refunds as expected, one for a paid ticket, the other for the fees/taxes on an award ticket. Both were international itineraries. No complaints from me about this so far.
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Old Apr 22, 20, 9:31 am
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Originally Posted by DrMilano View Post
Explains why Delta will not refund two cancelled international flights, as their new business model is also to hold on to customers money despite a warning from the DOT.
Yeah, I'd like to see a reference on this. I've had no issues getting two flights cancelled and refunded via phone and a few more award tickets refunded (including taxes/fees) online including as recently as last week.

Not saying that it isn't happening (and I am sure being a Diamond Medallion makes my experience more seamless than most), but I haven't heard complaints about Delta not honoring refunds (at least not systemically.. with millions of refunds I am sure that a few got stuck between customer service rep and/or system cracks).
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Old Apr 22, 20, 9:41 am
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Originally Posted by DrMilano View Post
Explains why Delta will not refund two cancelled international flights, as their new business model is also to hold on to customers money despite a warning from the DOT.
Amex (and I'm sure Visa) to the rescue. You are entitled to the refund so you can do a chargeback rather than wait out their clock. I was told 14 days, then 30, then 45 days. I wasn't floating Delta over $5000.
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Old Apr 22, 20, 9:49 am
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Old Apr 22, 20, 10:12 am
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Certainly not as bad as UA (which reported $2.1B in losses though that included special charges).

Ed seems to understand the recovery will take time and is being realistic in his time horizons for air travel to normalize. The reduced cash burn helps, but ultimately until the general public feels safe to travel (and business gives biz travel the green light) the outlook will remain bleak.
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Old Apr 22, 20, 3:58 pm
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Originally Posted by Duke787 View Post
Ed seems to understand the recovery will take time and is being realistic in his time horizons for air travel to normalize. The reduced cash burn helps, but ultimately until the general public feels safe to travel (and business gives biz travel the green light) the outlook will remain bleak.
Bolded is the big question mark. I have a funny feeling that this forced work remote/work from home is going to shake out a lot of the fat that companies have gained over the past 10 years. Both in people and expenses. If they inadvertently realize they can do most of their work remote and without travel.... a lot of that biz travel may just disappear into the ether.
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Old Apr 22, 20, 5:00 pm
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There's still a lot of business travel that cannot be done as effectively via zoom, etc.

Let's not forget that during a lot of Q1, travel was pretty normal. Things started going south on travel to/from China when Wuhan was locked down with the resultant publicity, but lots of travelers weren't very aware of the developing situation and continued to travel as usual. That would have been around January 20-25th. It wasn't until much later (probably when Italy was infected) that USA news other than some of the financial cable networks said much about COVID-19. Before then, people weren't very aware of the situations in South Korea, Hong Kong, and other parts of Asia (except Mainland China to some extent) until the Corona (Diamond) Princess became a big story.
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Old Apr 22, 20, 9:34 pm
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Originally Posted by MSPeconomist View Post
There's still a lot of business travel that cannot be done as effectively via zoom, etc.
Perhaps, though a key barrier to the resumption of business travel is the inability to obtain insurance against COVID-19 liability at any price. Even if/as that becomes less of an issue, I do think some sizable percentage of business travel is simply gone for good. Even a "permanent" 20% drop in business travel would prove an Earth-shattering event for legacy carriers in the USA and globally, and I think that number is on the lower end of what ultimately shakes out as the new normal.
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Old Apr 23, 20, 7:23 am
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Originally Posted by nerdbirdsjc View Post
Perhaps, though a key barrier to the resumption of business travel is the inability to obtain insurance against COVID-19 liability at any price. Even if/as that becomes less of an issue, I do think some sizable percentage of business travel is simply gone for good. Even a "permanent" 20% drop in business travel would prove an Earth-shattering event for legacy carriers in the USA and globally, and I think that number is on the lower end of what ultimately shakes out as the new normal.
I agree with that (except Iím not sure about 20%). Many large corporations were already casting a critical eye on travel from an ESG perspective; I think this meaningfully accelerates moves to limit travel and reduce corporate carbon footprints. Maybe instead of sending 4 people to a sales meeting in person, you send 1-2 and the rest join by Zoom.
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Old Apr 23, 20, 8:17 am
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Originally Posted by acrophobia View Post
I agree with that (except I’m not sure about 20%). Many large corporations were already casting a critical eye on travel from an ESG perspective; I think this meaningfully accelerates moves to limit travel and reduce corporate carbon footprints. Maybe instead of sending 4 people to a sales meeting in person, you send 1-2 and the rest join by Zoom.
The promise of remote collaboration superseding working is a tale as old as time. And certainly, some workers will drop off.

The other side of the coin that people don't talk about as much - but I see with many of my clients - is the increasing number of "permanently remote" workers. There is one client I work for where it seems like a good third of their workforce isn't located near any of their corporate offices. They work remote most of the time... but travel to the office once or twice a quarter for various events and meetings.

This is a pretty endemic trend: it is cheaper for a company based in a high cost of living area to occasionally import workers for in-person events from a low-cost state. Paying someone $100K in Texas rather than $150K in New York is a pretty compelling value prop and pays for a lot of flights and hotels. Plus it lets them tap a wider talent pool that may otherwise be limited.
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Old Apr 23, 20, 8:18 am
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And think about large in-person conferences until a vaccine is developed. A lot of my business travel is to industry conferences. The presenters can easily present online but for me the networking with other attendees is priceless and cannot be duplicated online. In addition, the conferences I attend make a lot of money from sponsors and exhibitors with a booth. This will all disappear without a large number of in-person attendees.
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Old Apr 25, 20, 9:46 am
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I've always viewed the role of big conventions for me as networking plus some small meetings. They're an important part of job hunting, for example. Sometimes I never go to any of the official sessions as the presentations are designed to disseminate results to the masses rather than present new cutting edge stuff in detail. In an online world, the small meetings would presumably be arranged by zoom at more convenient times and I certainly wouldn't watch/listen to the presentations remotely.

For smaller meetings, the networking aspect is even more important and valuable. Again, zoom wouldn't be an adequate substitute in the medium or long term. IMO part of the problem is that zoom meetings just aren't fun and just aren't very good for genuine discussion (nor is email).
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