• Joe Breitfeller

Delta Air Lines Reports a Second Quarter Adjusted Pre-Tax Loss of $881 Million or $1.07/Share

Delta Air Lines has reported a second quarter 2021 adjusted pre-tax loss of $881 million or ($ 1.07) per share. The carrier’s second quarter revenue declined 43 percent to $7.1 billion compared to the second quarter of 2019.


Delta Air Lines Reports Second Quarter 2021 Financial Results - Courtesy Delta Air Lines

On Wednesday (July 14, 2021), Delta Air Lines, Inc. (NYSE: DAL) reported a second quarter 2021 adjusted pre-tax loss of $881 million or ($ 1.07) per share and a net loss of $678 million. Revenue for the second quarter declined year-over-two by 43 percent to $7.1 billion. The adjusted pre-tax loss of $881 million excludes a $1.5 benefit related to extensions of the original 2020 Payroll Support Program under the U.S. Cares Act (PSP2 and PSP3) and mark-to-market investment adjustments. Delta’s total operating expenses, including the $1.5 billion in PSP benefits, decreased by $4.1 billion compared to the second quarter of 2019.


At June 30, 2021, the airline has $17.8 billion in liquidity, including cash and equivalents, short-term investments, and undrawn revolving credit facilities of $2.6 billion. Delta’s total debt and finance lease obligations at the end of the quarter totaled $29.1 billion, reduced to $18.3 billion on an adjusted basis.


In Wednesday’s announcement, Delta Air Lines’ Chief Executive Officer, Ed Bastian, said,


“With the best employees and operation in the industry and an accelerating demand environment, we achieved significant milestones in the quarter including a solid pre-tax profit in the month of June, positive free cash flow for the June quarter, and our people and our brand being recognized with the top spot in the J.D. Power 2021 Airline Study. Looking forward, we are harnessing the power of our differentiated brand and resilient competitive advantages to drive towards sustainable profitability in the second half of 2021 and enable long-term value creation.”


“Domestic leisure travel is fully recovered to 2019 levels and there are encouraging signs of improvement in business and international travel. With the recovery picking up steam, we are making investments to support our industry-leading operation. We are also opportunistically acquiring aircraft and creating upside flexibility to accelerate our capacity restoration in 2022 and beyond in a capital-disciplined manner.”


For the second quarter, Delta generated $1.9 billion of operating cash flow, $1.5 billion of free cash flow and an adjusted free cash flow of $195 million. The airline’s cost per available seat mile (CASM) for the second quarter was up 0.5 percent compared to Q2 2019, while CASM-Ex (excluding fuel) increased 9.0 percent year-over-two on 32 percent less capacity. During the second quarter, Delta also voluntarily contributed $1.5 billion to their pension plans, which the company expects to be fully-funded on a Pension Protection Act (PPA) basis, as included in the American Rescue Plan Act of 2021.

Also commenting in today’s financial report, Delta Air Lines President, Glen Hauenstein, added,


“With accelerating demand for air travel and growing affinity for Delta’s best-in-class products, June quarter adjusted operating revenue improved 76 percent from the March quarter. Increasing customer engagement is evident with spend on the American Express co-brand credit card already exceeding 2019 levels and a record number of new customers signing up for SkyMiles accounts during the June month. I am excited to see this momentum continuing in the September quarter as business travel rebounds and international markets continue to reopen.


“We have the industry’s best domestic and global network, an increasingly efficient and simplified fleet, a de-commoditized product, a highly valued brand, and the industry’s best employees. Combined with our more efficient cost structure, we are on a path to improve on pre-pandemic margins and generate sustainable free cash flow.”


Since October 2020, Delta has reduced their financial obligations by $11 billion, freeing up $6 billion in collateral, while driving $500 million in annual pension and interest expense savings. The company’s Air Traffic Liability at the close of the second quarter increased $1.5 billion versus Q1 to $6.9 billion, attributable to the increase in travel demand. Travel credits account for 35 percent of the liability and represent around five percent of daily bookings.


Delta recently announced the acquisition of seven leased Airbus A350s and the purchase of 29 used Boeing 737-900ERs, in addition to 25 Airbus A320neo options exercised in April, which will drive incremental CAPEX of approximately $700 million during H2 2021. For FY 2021, Delta expects a total gross CAPEX of around $3.2 billion.


Delta Air Lines (NYSE: DAL) is the global U.S. airline leader in safety, innovation, reliability and customer experience. For the last decade, the carrier has led the industry in operational excellence, while maintaining their reputation for award-winning customer service.



Source: Delta Air Lines