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Delta expects second-quarter revenue to slump, looks to amend debt deals

FILE PHOTO: Delta Air Lines passenger planes parked in Birmingham

(Reuters) – U.S. carrier Delta Air Lines on Wednesday forecast a 90% plunge in second-quarter revenue and warned it would need to renegotiate its debt agreements to avoid a default next year.

The company said it expected to end the year with $10 billion in cash, cash equivalents, short-term investments and borrowing capacity. (https://bit.ly/3cRnTmX)

Delta had $6 billion in unrestricted liquidity at the end of its first quarter.

“Based on the reduction in demand that we have experienced and are continuing to experience as a result of the COVID-19 pandemic, we expect that we will not be able to satisfy the current minimum fixed charge coverage ratio by early next year,” the company said.

Delta said it added 100 domestic flights in June as state-wide lockdowns are lifted and domestic leisure travel returns, and expects to reduce its average daily cash outflow to zero by the end of 2020.

(Reporting by Sanjana Shivdas in Bengaluru; Editing by Aditya Soni and Sriraj Kalluvila)

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