Delta CEO optimistic for 2021 despite Q1 loss
Yahoo Finance’s Adam Shapiro speaks with Delta CEO on the air line’s first quarter earnings and outlook on vaccine passports.
Video transcript
[ALARM]
MYLES UDLAND: All right, earnings season really getting underway here. We've talked a lot about the banks. Talked to PepsiCo's CFO earlier in the program. Delta also out with its latest quarterly results. Yahoo Finance's, Adam Shapiro, joins us now with the full story on how Delta, Adam, is seeing things line up. And what's going to be an interesting, and for them, hopefully, transformative 2021.
ADAM SHAPIRO: Yeah, well, transformative is the right word, because they're making big changes to their fleet. But let's get to the headlines that are [INAUDIBLE] to investors. Ed Bastian told Yahoo Finance that he believes that they will be profitable by June, and that that will continue into the summer quarters and months after.
They hit a big milestone this month, which was the $4 million positive cash flow. Remember, they had been burning-- cash burn was about $11 million on average every day. But here's what he told us about the earnings.
ED BASTIAN: Though it really depends on the pace of the recovery. The schedule capacity you have is right. The actual sellable capacity is down 40% because for the month of April, we're still out in the middle phase. So, that's the comparison to the down 50 on revenues. Down 40 in capacity, down 50 in revenue.
We think this summer that we will continue to see growth. It's going to be-- your question is really going to be addressed by how quickly we can get international borders open. We're working with that with various governments around the world. Right now, it appears it may still be six or more months out before we start to see international travel starting to pick up. And the recovery of corporate business.
We're still in a relatively muted state around corporate travel, only about 20% of what it ought to be. And I think as vaccinations grow and companies start to reopen their offices, you'll see travel, corporate travel start to pick up in the late summer, early fall. And at that point, we'll have a better sense for where we expect capacity to be by the end of the year and into 2022.
ADAM SHAPIRO: So, the overall total revenue in the quarter, $4.2 billion, and then the adjusted revenue of $3.6 billion. Which to you represents the better determinant of what's happening with this airline?
ED BASTIAN: The adjusted. The total includes sales of fuel products out of our refinery that get offset, that get eliminated within the cross-line. So, it's not a real-- It's not patchy revenue. It's not total [INAUDIBLE] business. So, I look at the adjusted numbers.
ADAM SHAPIRO: He is not expecting that international return to travel, as well as business return to travel, for another six months, and wouldn't really go far out into 2022 or '23 as to guidance for the airline. But the key for Bastian, Myles and Brian, is that they are now cash flow positive and they see profitability in two months.
BRIAN SOZZI: Adam, did you guys talk about vaccine passports?
ADAM SHAPIRO: We did and not his favorite idea. He thinks that there will be some form of requirement for international travelers to show proof of a vaccine, but he doesn't think that's necessary here in the United States for domestic travel.
MYLES UDLAND: All right, Yahoo Finance's, Adam Shapiro, with the latest on Delta's earnings report. Adam, we'll hear updates from you throughout today's coverage on Yahoo Finance [INAUDIBLE].
