2021, the year of takeover for Delta Airlines?

On the occasion of the new year, Ed Bastian, CEO of Delta Airlines, presents the ‘ambitious objectives’ that the company wishes to achieve in 2021. According to the CEO, this ‘year of recovery’ should be marked by two phases separate, a first that will ‘look a lot like 2020, with deeply depressed travel demand’ and a second that will start with mass vaccination and allow ‘a significant return to travel’.

In addition to protecting people, employees and travelers, Ed Bastian insists on the importance of exploiting innovation and agility. “We are going to build a new Delta focused on medical and economic recovery that has not yet taken shape,” he promises.

“Delta’s commitment to becoming a carbon neutral airline continues to be a top priority, and our 10-year, $ 1 billion investment in sustainable technology and practices remains intact,” he continues. “Likewise, our goal of becoming a racially just and equitable organization will be at the forefront this year, as will our efforts to strengthen the communities in which we live, work and serve,” he concluded.

Management sets course for 2021

The bond, which has rebounded nicely from its low in May (at just over 64% of par) is now trading at around 96.64%, for a yield of 4.21%. The rebound is a testament to renewed investor confidence in the Atlanta-based airline. Nevertheless, the remuneration remains high, which reflects a high risk, as illustrated by the “BB” rating, in the speculative category, at Standard & Poor’s.

The situation remains tense for Delta Airlines, which reported a loss per share of $ 2.53 for the fourth quarter of 2020, slightly higher than expected by analysts. Impacted by the Covid-19 pandemic on the business, like the entire airline industry, the Atlanta-based carrier ended 2020 with a heavy loss ($ 12.4 billion).

2020, “the toughest year in Delta’s history”

The group wants to be optimistic. “The fourth quarter 2020 results capped the most difficult year in Delta’s history,” said Ed Bastian, CEO of the airline, quoted in the quarterly earnings release. “As our challenges continue in 2021, I am optimistic that it will be a year of recovery and a turning point for Delta which will come back stronger by resuming its revenue growth, profitability and the generation of treasury, ”he added.

A three-phase recovery in 2021

Delta Airlines identifies three phases in 2021. “The start of the year will be characterized by an unstable recovery in demand and a compressed reservation curve,” said Glen Hauenstein, President of Delta Airlines. “It will be followed by an inflection point, and finally a sustained rebound as customers regain confidence, vaccines become widespread and offices reopen,” he said.

Delta Airlines is one of the world leaders in its sector, with a global reach. In 2019, excluding the pandemic, the airline provided more than 5,000 daily departures and up to 15,000 affiliated departures, including the first SkyTeam alliance, of which Delta is a founding member. Delta serves nearly 200 million people each year, taking customers from its leading global network to more than 300 destinations in more than 50 countries.

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