It Could Take 3 Years for Delta to Reach ‘Sustainable Recovery’

Over 37,000 employees have elected to take voluntary unpaid leave

The airline’s passenger traffic is currently down 95%. - Credit by Getty Images
Headshot of Ryan Barwick

It could take three years for Delta Air Lines to return to where it was financially before Covid-19, according to CEO Ed Bastian.

In the airline’s Q1 earnings call Wednesday, Bastian said that given “the combined effects of the pandemic and the associated financial impact on the global economy, we believe it could be up to three years before we see a sustainable recovery.”

Although it wasn’t a total surprise, given the fallout in the airline industry since travel restrictions went into place in March, Delta announced that it was expecting to see revenue fall 90% in Q2. Revenue fell only 18% in Q1, buoyed by strong performance in January and February.

This was Delta’s first quarterly loss in almost a decade. The airline’s passenger traffic is currently down 95%.

“The first quarter of 2020 has truly been like no other in our history,” said Bastian. “This has led to an unprecedented situation where demand for near-term air travel dropped to almost zero in a matter of weeks.”

Bastian also said that more than one-third of the airline’s workforce, 37,000 employees, had elected to take voluntary, unpaid leave, ranging from 30 days to a year.

For those still flying, the airline has eliminated the use of middle seats to ensure social distancing measures in the sky.

More than a week ago, the airline said it had agreed to over $5.4 billion in relief from the Treasury Department, $1.6 billion of which is a loan. While Delta is applying for that loan, it’s currently just to hold its place in line. The airline will decide to take the loan in the coming months.

Even if Covid-19 continues to rage across the globe, the airline industry might not get any more financial assistance from the federal government. When asked, Bastian said that he didn’t think there was a political “appetite” for additional relief.


@RyanBarwick ryan.barwick@adweek.com Ryan is a brand reporter covering travel, mobility and sports marketing.