Delta "brenner av" 10-12 mill $/dag - Curt Lewis

 

Delta Air Lines Sees Cash Burn Rate Edging Closer To Neutral

Delta Air Lines (DAL) on Tuesday said it expected its daily cash burn to narrow to $10 million-$12 million in the fourth quarter, as the carrier navigates through a "steady but stable recovery in demand." However, Delta stock and other airline stocks were mixed, after surging Monday on coronavirus vaccine news.

The carrier made the forecast after United Airlines (UAL) on Monday also pointed to further rebound in demand, saying it expected Thanksgiving week to be "its busiest since March."

Delta's fourth-quarter expectations, outlined in presentation materials for an industry conference, come after the coronavirus pandemic, and travel restrictions put in place around the world, caused travel demand and airline stocks to plummet.

The carrier expects fourth-quarter revenue to be down 65% to 70% vs. a year earlier, better than the lows the industry went through in April. And it said net sales "continue to trend higher" when compared to the third quarter.

The company expected flight capacity to fall 40% to 45% in the fourth quarter, as demand remains subdued and airlines park jets they don't currently need.

Airlines have tried to rein in their cash burn as passengers stay off flights. Delta said it expected daily cash burn in the month of December to be $10 million. Daily cash burn averaged $24 million in Q3, down from Q2's average burn rate of $43 million.

The company expected operating expenses for the fourth quarter to be 50% lower than a year ago.

Delta Stock, Airline Stocks

Delta stock rose 0.7% to close at 37.04 in the stock market today. DAL stock is still above a 35.17 buy point from a bottoming base cleared Monday. But shares were still well off highs reached last year.

Delta stock has a 44 Composite Rating. Its EPS Rating is 7.

The broader market jumped on Monday, after Pfizer (PFE) and BioNTech (BNTX) said their coronavirus vaccine candidate was found to be more than 90% effective in preventing the disease in people that hadn't shown evidence of prior infection, based on an early analysis from a Phase 3 study.

Pfizer may submit its coronavirus vaccine for emergency FDA approval later this month, but it would likely be months before it's widely available. Meanwhile, U.S. coronavirus cases are now rising by more than 100,000 a day, while several European countries are in partial lockdowns to try to control spiraling Covid-19 cases.

But stocks that were hard-hit by the pandemic, like airline stocks and companies like Disney (DIS), jumped on the news. Delta stock jumped 17% on Monday. American Airlines (AAL) and United Airlines made similar advances.

Among other airline stocks on Tuesday, United Airlines retreated 3.1%. United, on Monday, said it would add more than 1,400 domestic flights the week of Nov. 23.

United said it expected around half of its customers traveling for Thanksgiving to book flights less than 30 days prior to departure, up from around 40% last year.

American Airlines stock gave up 6.2%. Southwest Airlines (LUV) added 2.1%.

The pandemic has forced the airline industry to furlough thousands of employees, seek a second round of government rescue aid, and raise or borrow money. Delta, in the presentation on Tuesday, said it had raised more than $25 billion in financing this year.