Delta’s 2020 Loss Was Huge, As Expected, But Soft Demand Is Calling Recent Optimism Into Question

deltas 2020 loss was huge as expected but soft demand is calling recent optimism into question

Delta Airlines CEO Ed Bastian. (Angela Rowlings/Getty Images) MediaNews Group via Getty Images

Delta Air Lines DAL , regarded by analysts as the best-performing of the world’s big, conventional airlines, lost $12.3 billion in a disastrous 2020 – and $755 million in a slightly less disastrous fourth quarter.

Top executives continue to say that Delta expects to return to break even on a cash flow basis this spring. Assuming it happens, that will be almost entirely the result of further cost cutting, not improvement in passenger travel demand during the first half of this year.

Indeed, Delta officials today subtly ratcheted back on recent public comments that strongly implied the carrier foresees the beginning of a recovery in demand and revenue generation in the second half of the year. As recently as Jan. 1, in a note to airline employees, CEO Ed Bastian had said the company expected to achieve positive cash flow performance by late spring and a much improved – though still very sub-par – demand environment beginning in the second half of the year.

But travel demand growth came pretty much to a halt in November, remained soft even during the holiday-influenced December, and has plummeted in January, causing some negative revision in Delta’s view about how this year will go.

“The early part of the year will be characterized by choppy demand recovery and a booking curve that remains compressed,” Delta President Glen Hauenstein said, acknowledging that the reality so far this year is not living up to the company’s very recent, somewhat positive expectations.

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