DAL Q4 2020 Earnings

Call Details

• Call Title: Delta Air Lines, Inc. Q4 2020 Earnings Call
• Date: January 14, 2021 at 4:00 PM UTC
• Management Team:
  • Ed Bastian (Chief Executive Officer)
  • Glenn Hauenstein (President)
  • Gary Chase (Interim Co-Chief Financial Officer)
  • Jill Greer (Vice President of Investor Relations)
  • Peter Carter (Senior Finance Representative)
  • Tim Mayes (Chief Marketing and Communications Officer)

Call Summary

Financial Performance

• Delta reported a December quarter pre-tax loss of $2.1B and a full year pre-tax loss of $9.0B.
• December quarter revenues were $3.5B, which were 30% of prior-year levels, reflecting a 70% shortfall versus 2019.
• All-in unit costs were down 4.5% year-over-year despite flown capacity being down 44% in the December quarter.
• Average daily cash burn was $12M in the December quarter, which was half the September quarter run rate of $24M.
• Cargo revenue grew 10% year-over-year in the December quarter while MRO revenue declined nearly 30% year-over-year.
• Adjusted net debt was $18.8B at year-end, which was up approximately $8B versus year-end 2019.

Guidance

• Delta expects March quarter revenues at 35% to 40% of March quarter 2019 levels and March quarter sellable capacity about 55% lower than 2019.
• Delta expects March quarter average daily cash burn of $10M to $15M and expects cash burn to reach break-even or better by the second quarter.
• Delta expects a return to profitability in the summer and a sustained recovery in the second half of 2021 assuming vaccine distribution and easing travel restrictions.
• Delta projects March quarter operating expense to be 35% to 40% lower than March quarter 2019, with total unit cost including fuel down 5% to 10% on approximately 35% lower flown capacity.
• Delta expects to end the March quarter with $18B to $19B in liquidity inclusive of about $3B of expected PSP payroll support funds.
• Delta expects to sustain non-fuel unit costs at or below 2019 levels by the December quarter of 2021 on roughly 75% of 2019 capacity levels.
• Delta stated PSP extension terms are identical to PSP 1 and noted associated warrants have strike prices near $39.