Delta Air chief executive aims to achieve positive cash flow target in 2021
Ed Bastian, however, warned that travel demand will remain 'deeply depressed' initially
Delta Air Lines’ chief executive Ed Bastian reiterated the carrier’s aim to achieve positive cash flow by the spring as it plans for a “year of recovery”.
He warned that travel demand will remain “deeply depressed” initially, with the company’s focus on health and safety for passengers. A “significant” resumption of travel, particularly for business, will come when vaccines become widely available, he said in a memo marking the new year.
“As difficult as 2020 was, in many ways I expect the next 12 months to be even more challenging,” he said, predicting that vaccinations will mark the turning point for the industry. “While I am optimistic this will be a year of recovery, the continued uncertainty of the pandemic means we will need to be nimble, ready to adjust our course and adapt to an ever-changing environment.”
Mr Bastian last reiterated the spring target for cash flow on December 8.
Delta shares dropped 31 per cent in 2020, compared with the 16 per cent gain in the US benchmark S&P Index.
Airlines have been devastated by the Covid-19 pandemic, with some operators being placed into insolvency and governments around the world disbursing $173 billion in support for the industry, according to the International Air Transport Association.
The trade body is forecasting that the industry will lose an estimated $157bn in revenue across 2020 and 2021 as a result of the pandemic.
The US travel industry is preparing for a rebound in demand with the arrival of vaccines. After months of deep discounts – with hotels offering lavish perks and airlines dangling fares as low as $21 from New York to Florida – prices are set to make up at least part of the ground they lost.
Trip providers have slashed capacity, so any gains in bookings will tend to boost rates. And as vaccines take hold, they are poised to unleash a torrent of pent-up vacation demand as people emerge from months of being cooped up at home. That is leading to optimism within the industry for an upswing in the spring and summer, even as rates remain depressed and a recovery in business travel is a long way away.
The carriers also got a bump with travel around Thanksgiving and year-end holidays, as passengers going through US airport screening reached the highest levels since the start of the pandemic.
Published: January 2, 2021 05:32 PM