Delta CEO targets a positive cashflow by spring of 2021

By Rahul Vaimal, Associate Editor
Delta
Representational Image

One of the most leading airline groups in the US, Delta Air Lines is targeting to attain a positive cash flow by the spring of 2021 as the carrier plans for a ‘year of recovery’.

The chief executive of the airline group Ed Bastian warned that the air travel demand is expected to remain deeply impaired in the first, with the company’s focus on health and safety for passengers and a notable recovery in travel, especially for business will only come when vaccines become widely available.

Ed Bastian
Ed Bastian
CEO- Delta Air Lines

“As difficult as 2020 was, in many ways I expect the next 12 months to be even more challenging. 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.”

Last year, the shares of Delta dropped by 31 percent, compared with the 16 percent gain in the US benchmark S&P Index. Mr. Bastian last reiterated the spring target for cash flow in December.

With the COVID-19 outbreak, the airline industry has been severely affected, with some operators being placed into insolvency and governments around the world disbursing around $173 billion to support the sector, according to the International Air Transport Association (IATA). The trade body has estimated a loss of nearly $157 billion in revenue in the period of 2020 and 2021 due to the pandemic.

The travel industry in the US is preparing for a rebound considering the arrival of vaccines. After months of deep discounts with hotels offering perks and airlines lowering fares even up to $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. As the vaccines take hold, they are poised to unleash huge vacation demand as people emerge from months of being at home. And it is creating optimism in the industry for an upswing in the spring and summer, even as rates remain low and a recovery in business travel takes a long time.

The carriers also witnessed a surge in travel around Thanksgiving and year-end holidays, as passengers going through US airport screening reached the highest levels since the start of the pandemic.

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