Delta Air Lines Announces March Quarter 2021 Financial Results

March quarter 2021 GAAP pre-tax loss of $1.5 billion and loss per share of $1.85 on total revenue of $4.2 billion

March quarter 2021 adjusted pre-tax loss of $2.9 billion and adjusted loss per share of $3.55 on adjusted operating revenue of $3.6 billion

Acceleration in demand supported positive cash generation in the month of March, marking a criticalmilestone in our recovery

ATLANTA, Apr. 15, 2021 – Delta Air Lines (NYSE:DAL) today reported financial results for the March quarter2021 and provided its outlook for the June quarter 2021.Highlights of the March quarter 2021 results, including both GAAP and adjusted metrics, are on page five and are incorporated here.

“A year after the onset of the pandemic, travelers are gaining confidence and beginning to reclaim their lives. Delta is accelerating into the recovery with our brand stronger and more trusted than ever before,” said Ed Bastian, Delta’s chief executive officer. “Thanks to the incredible efforts of our people, we achieved positive daily cash generation in the month of March, a remarkable accomplishment considering our middle seat block and the low level of demand for business and international travel. If recovery trends hold, we expect positive cash generation for the June quarter and see a path to return to profitability in the September quarter as the demand recovery progresses.”

March Quarter Financial Results  • Adjusted pre-tax loss of $2.9 billion excludes $1.2billion of benefit related to the first payroll support program extension (PSP2), which is partially offset among other items by the debt extinguishment charges incurred when prepaying our $1.5 billion slots, gates and routes term loan• Adjusted operating revenue of $3.6 billion declined 65percent on 55 percent lower sellable capacity (see Note A) versus March quarter 2019• Total operating expense, which includes the $1.2billion benefit related to PSP2, decreased $3.9 billion over the March quarter 2019. Adjusted for the benefit related to PSP2 and third-party refinery sales, total operating expense decreased $3.1 billion or 33percent in the March quarter compared to March quarter 2019, driven by capacity- and revenue-related expense reductions, lower salaries and related costsand strong cost management across the business• During the March quarter, cash burn (see Note B)averaged $11 million per day and turned positive in the month of March with cash generation of $4 million per day• At the end of the March quarter, the company had $16.6 billion in liquidity, including cash and cash equivalents, short-term investments and undrawn revolving credit facilities.  The company had total debt and finance lease obligations of $29.0 billion withadjusted net debt of $19.1 billion, which was higher than prior guidance as a result of aircraft financing decisions

June Quarter 2021 Outlook


  1 Compared to June quarter 2019

 2 Non-GAAP measure

 3 Includes estimated PSP3 funds of ~$2.7 billion expected to be received in the June quarter 2021

Revenue Environment

“Recent demand trends are encouraging with risingconfidence in air travel as vaccination rates improve and travel restrictions ease, with current domestic leisure bookings 85% recovered to 2019 levels,” said Glen Hauenstein, Delta’s president.  “In the June quarter, we expect significant sequential improvement in revenue as leisure demand accelerates into the peak summer periodand we add capacity efficiently with the removal of our seat block May 1 with revenues recovering to 45 to 50percent of 2019.”   

Delta’s adjusted operating revenue of $3.6 billion for the March quarter was down 65 percent compared to the March quarter 2019, a four-point sequential improvement from December quarter 2020.  Passenger revenues declined 70 percent in the March quarter 2021 compared to March quarter 2019 on 55 percent lower sellablecapacity as Delta was the only carrier to continue blocking middle seats. Domestic passenger revenues were down 66 percent versus March quarter 2019, but up more than five-points in comparison to the preceding quarter’s results driven by leisure demand. Internationalpassenger revenue remains limited at down 81 percentcompared to March quarter 2019, driven by continued travel restrictions.

For the month of March, passenger revenue was 50percent higher than February, nearly 15-points better than normal seasonality trends driven by momentum in leisure demand.  Net cash sales, defined as tickets purchased less tickets refunded, doubled from the month of January to the month of March and are continuing to improve. Corporate demand declined 80 percent versus the March quarter 2019. The corporate recovery showed signs of improvement during the quarter with March volumes improving relative to February at a rate twice the normal seasonal growth between the two months.  

Non-ticket revenues outperformed passenger revenues, with cargo revenues up 12 percent versus the Marchquarter 2019 and total loyalty revenues down 48 percent.American Express remuneration declined 23 percent over the same period as card spend continues to recoverfaster than passenger traffic.

Cost Performance

“I’m pleased with how the team came together to deliver for each other and our customers, while producing great cost performance.  As the recovery begins to take root, I’m excited to see our focus shift from stabilizing the company’s financial position to creating value by returning to profitability, generating cash and restoring our balance sheet,” said Gary Chase, Delta’s interim co-chief financial officer.  “We expect to narrow our June quarter adjusted pre-tax loss to $1 to $1.5 billion, with progressive improvement to a breakeven result for the month ofJune.”

Total adjusted operating expense for the March quarter decreased $3.1 billion excluding the $1.2 billion PSP2benefit and other COVID-19 related items. Delta’s CASM was 9 percent lower than the March quarter 2019.  CASM, adjusted was 4.1 percent higher than the March quarter 2019 on 36 percent less capacity. Expenseperformance was driven by a $923 million, or 47 percent reduction in fuel expense versus the March quarter 2019,a 38 percent reduction in maintenance expense and lower volume- and revenue-related expenses. Salaries and related costs and profit sharing of $2.2 billion were down 25 percent compared to the March quarter 2019. Fuel efficiency (see Note A) improved 12 percent in the March quarter versus the same period in 2019, with nearly half of the improvement a result of our fleet renewal efforts. The rest is driven by factors that we expect to be temporary including reduced air congestion and lower load factors.  

Compared to the March quarter 2019, our total adjusted operating expense was down 33 percent versus our initial guide of down 35 to 40 percent.  Higher fuel expense drove a nearly $100 million variance compared to our projections in January.  Adjusted fuel price of $1.91 per gallon was up 33 percent for the quarter compared to the December quarter 2020 and above initial expectations on higher than expected market prices and losses at the refinery equivalent to 23¢ per gallon. Non-fuel expenses were higher than projected due to employee-related COVID prevention expenses, including vaccines and testing, and recovery-related costs.

Non-operating expense for the March quarter was up $43million compared to the March quarter 2019, driven primarily by higher interest expense, partially offset by a gain on our Wheels Up investment.

During the March quarter we have reclassified certain amounts which were previously allocated to regional carrier expense to their natural line items within operating expense. These reclassifications better reflect the nature of these expenses and how management views them. This allocation was approximately $900 million in 2020, including $325 million in the March quarter 2020, and $1.4 billion in 2019, including $355 million in the March quarter 2019. The remaining amounts in the regional carrier expense represent payments to our regional carriers under capacity purchase agreements and the expenses of our wholly owned regional subsidiary, Endeavor Air, Inc. See Note C for a summary of this reallocation by operating expense line item.

Balance Sheet, Cash and Liquidity

“With our cash flow and earnings close to inflection, we have begun our journey of de-levering,” said Gary Chase, Delta’s interim co-chief financial officer.  “By the end of the June quarter, we will have reduced financial obligations by nearly $10 billion in a combination of paying down debt and accelerating pension funding since last fall. This reflects an unprecedented turnaround in the health of our pension plans over the last decade, securing the future of our retirees.”

At the end of the March quarter, the company had total debt and finance lease obligations of $29.0 billion with adjusted net debt of $19.1 billion, $8.6 billion higher than December 2019.  The company’s total debt had a weighted average interest rate of 4.5 percent at March quarter-end.  During the quarter, the company prepaid its $1.5 billion slots, gates and routes term loan.  By the end of the June quarter, total debt repaid and pension funding since the end of September quarter 2020 is expected to total nearly $10 billion.

As previously announced during the quarter, the company voluntarily funded $1 billion into its pension plans on April1. The company is evaluating up to $1 billion of additional voluntary contribution later this year to fully fund the pension plans based on the terms of the recently passed American Rescue Plan Act.  At this level of funding, investment returns are expected to satisfy future benefit payments, which we believe would eliminate any materialcash contributions to the plans going forward. 

Cash generated from operations during the quarter was $691 million, including the benefit from PSP2. Daily cash burn averaged $11 million for the quarter, turning positive in the month of March, with cash generation of $4 million per day as consumers gained confidence to travel and began buying tickets for travel further out, driving an extension of the booking curve.  With this booking curve improvement, the company’s Air Traffic Liability reversed a three-quarter trend of decline, increasing by more than$800 million since the end of 2020.  Travel credits represent nearly 50 percent of the Air Traffic Liability and represent approximately 10 to 15 percent of average daily bookings.  

Delta ended the March quarter with $16.6 billion in liquidity, including $2.6 billion in undrawn revolvercapacity. The company anticipates receiving approximately $2.7 billion in the June quarter from the U.S. Treasury under PSP3.

Other Highlights from the March quarter 

Culture and People:• Restored our people to full hours on January 1, 2021and announced plans to recall all 1,700 pilots that had been placed on inactive status• Vaccinated more than 44 percent of employees as of April 15, 2021 in keeping with our key priority of protecting our people• Administered more than 130,000 COVID-19 tests to employees during the quarter as part of our industry-leading testing program to help reduce the transmission of the virus• Committed to accelerating the funding of our pensionplans with a $1 billion voluntary contribution in April and evaluating up to $1 billion in additional contribution later this year• Committed to provide more equitable access to Delta benefits. This year, all Customer Service Agents will become eligible for all Delta benefits, including healthcare, as the Ready Reserve program is sunset• Recognized by FORTUNE as the most admired airline in the world for the 10th time• Strengthened our executive management team with the addition of Dr. Henry Ting, the industry’s first Chief Health Officer, Alain Bellemare, President-International and Michelle Horn, Chief Strategy Officer

Customer Experience and Loyalty:• Earned a hospital-grade “Diamond” rating from Airline Passenger Experience Association for cleanliness• Launched industry-first status accelerators, allowing customers to earn up to 75 percent more toward Medallion Status on most ticket types, including Award Travel• Announced the return of snack and beverage serviceto all flights beginning April 14, 2021, with the introduction of contactless payment technology, utilizing input from our flight attendants and our partners at Mayo Clinic• Extended the validity of all tickets expiring in 2021 and all tickets purchased in 2021 to now expire December 31, 2022 • Extended the existing change fee waiver for all tickets purchased through April 30, 2021• Created and launched a new interactive digital map to search by price or destination type. The tool integrates with Delta’s streamlined digital Travel Planning Center, a one-stop guide to resources to manage travel restrictions, testing requirements and everything else along the travel journey• Introduced nine new routes and added flights to more than 20 top leisure destinations this summer, complementing our recently announced Alaska service expansion• Launched enhanced elite reciprocal loyalty benefits on Delta and WestJet

Environmental, Social and Governance:• Realized 12 percent in fuel efficiency improvements during the March quarter 2021 vs March quarter 2019, with nearly half the improvement directly tied to our fleet renewal efforts.  The remaining impact wasdriven by operational benefits that we expect to be temporary, including reduced air congestion and lower load factors• Collaborating with our corporate customers to address aviation emissions with dedicated sustainable aviation fuels• Addressed the majority of our airline’s 13 million metric tons of carbon emissions from March – December 2020 through high quality, verified carbon offsets.Two key projects Delta supported were Rimba Raya and Keo Seima, which protect forests through a community-driven conservation model involving local communities in Indonesia and Cambodia.  We expect to address the remaining emissions from that 2020 period during the June quarter 2021• Partnered with the State of Georgia and the Hartsfield-Jackson Atlanta International Airport to create free COVID-19 vaccination sites in the ATL airport and at the Delta Flight Museum, with more than 57,000vaccinations, including to our employees, provided during the March quarter• Enhanced hiring practices to reduce bias in job descriptions and qualifications, introducing hiring manager training to ensure fair and inclusive interviews, and improving reporting to monitor diversity in candidates and hires

Payroll Support Program / Government GrantAccounting 

In the March quarter, $1.2 billion of PSP2 was recognized as a contra-expense, which is reflected as “governmentgrant recognition” on the Consolidated Statements of Operations. The remaining funds under PSP2 are expected to be recognized in the June quarter.

March Quarter Results

March quarter results have been adjusted primarily for the government grant recognition, unrealized gains on investments, loss on extinguishment of debt, impairment and equity method losses and restructuring charges as described in the below reconciliations.


About Delta Air Lines  Delta Air Lines (NYSE: DAL) is the U.S. global airline leader in safety, innovation, reliability and customer experience. Powered by our employees around the world, Delta has for a decade led the airline industry in operational excellence while maintaining our reputation for award-winning customer service.

Today, and always, nothing is more important than the health and safety of our customers and employees. Since the onset of the COVID-19 pandemic, Delta has moved quickly to transform the industry standard of clean while offering customers more space across the travel journey. These and numerous other layers of protection ensure a safe and comfortable travel experience for our customers and employees. 

With our mission of connecting the people and cultures of the globe, Delta strives to foster understanding across a diverse world and serve as a force for social good.

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