ATLANTA -- Delta Air Lines had a $5.7 billion net loss for the second quarter and is cutting its workforce through buyouts and early retirements.
More than 17,000 employees have signed up to take early retirements or buyouts, according to Delta.
That's about 20% of the company's workforce. The voluntary departures are expected to help reduce the need for involuntary furloughs or layoffs.
"I'm optimistic if we do have a furlough, it's going to be relatively small numbers," Delta CEO Ed Bastian said during remarks on CNBC Tuesday.
The quarterly loss reflects "the truly staggering impact" of the coronavirus pandemic, Bastian said in a written statement. "We continue to believe that it will be more than two years before we see a sustainable recovery," he added.
Atlanta-based Delta cut its flying by 85% in the quarter ended June 30, but its passenger counts declined even more, down 93%.
Now, "with the virus spreading in the South, it's put a pause on demand growth," Bastian said in an interview with The Atlanta Journal-Constitution.
The airline announced Tuesday plans to retire its Boeing 737-700 fleet, a smaller plane type that Bastian said is not as economical. That's part of more than 100 planes Delta is retiring for good from its fleet of more than 1,000 aircraft. It has already retired all of its MD-88s and MD-90s and plans to retire its entire Boeing 777 fleet and some of its Airbus A320s and Boeing 767-300ERs.
A year ago, Delta as one of the world's largest airlines had second-quarter operating revenue of $12.5 billion. That declined 88% to $1.5 billion in the most recent quarter.
The company managed to cut back its second-quarter operating expenses to $6.3 billion from $10.4 billion a year ago by parking planes, asking workers to take unpaid leave, cutting hours and pay and reducing other expenses.
To cut its staff, the airline has been offering buyouts and early retirements. Delta and other airlines have said if they cannot cut their staffs enough through voluntary measures, they would resort to layoffs.
The airline had additional charges for airplane retirements, write-downs of its investments in struggling airline partners including LATAM and Aeromexico, which filed for bankruptcy protection, as well as Virgin Atlantic. Adjusted for those factors and others, it said its quarterly adjusted pre-tax loss amounted to $3.9 billion.
Delta has benefited from government rescue funding for airlines, getting $5.4 billion of grants and unsecured loans through the CARES Act.
It has also raised billions in other loan financing for a cash position of $15.7 billion at the end of June. The company in June burned through an average of $27 million a day in cash, but expects to reach breakeven by the end of the year. Even without improvements in the business, Bastian said the amount of cash the company has built up should last for 19 months.
"I think our cash position has certainly stabilized," he said.
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