Delta Air Lines (DL, Atlanta Hartsfield Jackson) has announced that it will retire all 10 of its B737-700s by the end of 2020, as well as "certain" A320-200s and B767-300ERs as it downsizes to meet post-COVID demand.
"The company made the decision to retire the entire MD-90, B777, and B737-700 fleets and portions of its B767-300ER and A320 fleets by late 2020. This is in addition to the decision in the March quarter to accelerate the retirement of its MD-88 fleet from December 2020 to June 2020. The company also cancelled its purchase commitment for four A350-900s aircraft from LATAM Airlines Group. Primarily as a result of these decisions, the company recorded USD2.5 billion in fleet-related and other charges," Delta said in its quarterly results announcement.
While all of Delta's McDonnell Douglas twinjets have already been retired, the other types are undergoing a more gradual phase-out. According to the ch-aviation fleets module, Delta currently operates ten B737-700s, sixty-two A320-200s, fifty-six B767-300(ER)s, eight B777-200ERs, and ten B777-200(LR)s. Nearly all of these aircraft are owned by the airline except for four A320-200s owned by Verizon but managed by Delta.
The carrier's quarterly results, besides providing more colour on its fleet plans, reveal the scale of the market collapse caused by the COVID-19 pandemic. Delta lost USD7.1 billion pre-tax during the second quarter of 2020, including USD3.2 billion in items directly related to the pandemic, such as fleet restructuring costs and other write-downs. Besides the USD2.5 billion charge associated with the downsizing of the fleet, the carrier also recorded a write-down of USD1.1 billion in its investment in LATAM Airlines and USD770 million in its investment in Aeroméxico (AM, México City International). Both Latin American airlines are currently undergoing Chapter 11 restructuring. Delta also wrote down its investment in Virgin Atlantic (VS, London Heathrow) resulting in a USD200 million charge.
Delta said that its revenues in the second quarter decreased by 91% compared to the same period of 2019.
One of the few positive sides of the pandemic was the opportunity to accelerate Delta's airport refurbishment projects at New York La Guardia, Salt Lake City, and Los Angeles International "in an effort to shorten timelines and lower the total cost for the projects".
Delta said that it had USD15.7 billion in liquid cash at the end of June 2020 with an average daily cash burn rate of USD27 million in June.