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Thursday airline updates: Aeromexico and Delta’s drastic losses

written by Dylan Nicholson | April 23, 2020

Delta has reported a $534 billion loss for the first quarter of 2020, and Aeromexico reported a loss of $100 million, as airlines begin to reveal the financial costs of coronavirus.

Delta’s figures represent a drastic fall compared with the same time last year when the airline posted a net income of $730 million. As such, the carrier has experienced a year-on-year fall of $1.26 billion.

Discussing the results, Delta chief executive Ed Bastian said, “These are truly unprecedented times for all of us, including the airline industry. Government travel restrictions and stay-at-home orders have been effective in slowing the spread of the virus, but have also severely impacted near-term demand for air travel, reducing our expected June quarter revenues by 90 per cent, compared to a year ago.”

In an effort to help manage the crisis, Delta has drastically slashed its capacity for the current quarter. In total, capacity has dropped 85 per cent. This has seen 90 per cent of international flights cut, alongside 80 per cent of domestic flights.

Also, as part of its expense management program, Delta has parked more than 650 aircraft, closed lounges and concourses and will offer employees voluntary unpaid leave.

As for Aeromexico, the Mexican carrier had earnings of over US$572 million during the first quarter, a 14 per cent drop compared with the same time last year.

Further adding to the central American airline’s woes is the fact that it experienced usual flight activity through January and February meaning that the full effect for the virus is expected to be felt more greatly in Q2.

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In other global airline news:

  • Air New Zealand is considering delaying the delivery of its Boeing 787-10s in light of recent events. The 787-10 is meant to replace the fleet of ageing 777-200ERs and allow Air New Zealand to fly new routes.
  • Mauritian airline Air Mauritius has been placed into administration. The airline’s board came to a decision following “a complete erosion of the company’s revenue base”.
  • Recent reports suggest that Finnair may now have over 100,000 refunds in the queue. And as much as airlines don’t want to pay out immediately, European regulations are making it clear that they have to.
  • UAE’s Emirates announced Tuesday that it is stepping up precautionary measures to stop further spread of COVID-19. As a result, the airline is now banning cabin baggage on its flights.
  • Ryanair’s chief executive, Michael O’Leary, claims that the airline will not start flying again if forced to leave the middle seat empty.
  • Japan’s newest lost-cost carrier is pushing ahead with its goal to fly to the US. Originally, Zipair was due to commence its first flights in May. It has had to cancel the launch due to the coronavirus outbreak but is still looking to include service to the US in its winter schedule and has officially applied for a flight route between Tokyo’s Narita airport and Honolulu in Hawaii.

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