Think things are bad for airlines? It’s about to get worse

The biggest and most profitable US airline just posted its first quarterly loss in more than five years.

Now things are going to get really bad.

Delta Air Lines Inc. reported Wednesday that it lost $534 million in the first three months of the year, when it suffered a glancing blow from the coronavirus pandemic during March.

For most of the first quarter, the virus seemed like an abstraction to many Americans.

Sure, it sounded dire, but it was an ocean away.

Life in the US unfolded normally. The economy was humming, people took business trips and leisure flights, planes were nearly full.

Since then, the virus brought restrictions on travel and stoked fear of being trapped in a flying aluminium tube while sharing recycled air with people who might be infected.

Travel has plunged about 95%.

Delta’s first-quarter revenue dropped 18% from a year ago.

The airline forecast a much grimmer picture for the second quarter, when the full impact of the global pandemic will be felt.

Revenue is expected to plunge 90% for Delta, and things will likely to look just as bleak or worse for its competitors.

It could be a long time before travel returns to pre-outbreak levels.

“Whether it’s three years or two years or four years is anyone’s guess,” said Delta CEO Ed Bastian.

About 2.3 million people passed through security checkpoints on March 1, unchanged from the same day last year. The numbers careened sharply lower from that point on, plunging below 100,000 by early April — a drop of about 95%. Airline officials say most of the people still flying are health care workers fighting the COVID-19 outbreak and individuals reuniting with family members.

Airlines for America, the industry’s trade group, said that over the past week flights within the United States have carried an average of about 12 passengers — it was nearly 100 in early January, when the virus outbreak was largely limited to Asia. The average on international flights has dropped from 150 to 26 in the same time.

Airlines have responded to the drop in traffic by cancelling thousands of flights. That triggers refunds to passengers who had tickets and can’t or don’t want to be rebooked on another flight. Delta and other airlines are spending more on refunds than they are taking in from new bookings — that’s called negative net bookings.

The percentage of seats sold on US airline flights dropped from 80.2% in January to 13.1% in the week of April 13-19, according to Airlines for America. That includes both domestic and international flights.

Demand for future air travel in the US was down 98.4% in the second week of April compared with a year earlier, according to the industry trade group.

Follow The Gleaner on Twitter and Instagram @JamaicaGleaner and on Facebook @GleanerJamaica. Send us a message on WhatsApp at 1-876-499-0169 or email us at onlinefeedback@gleanerjm.com or editors@gleanerjm.com.​