Delta Can't Avoid Shrinking-Airline Syndrome

Delta Air Lines Inc. may be the best positioned of the U.S. carriers to weather the pandemic slump in air travel, given its relatively strong balance sheet and historically top-tier operating performance. But even Delta sees reason for further cutbacks. It’s yet another reminder of just how painful the near-term trajectory is for the aerospace industry.

Delta on Tuesday reported a third-quarter loss that was 11% worse than analysts had been anticipating and said it was delaying $5 billion of aircraft purchases until after 2022. Most of the deliveries were meant to be Airbus SE jets, although a small number of Bombardier CRJ regional planes are also affected. Delta is also planning to accelerate the retirement of 400 older jets by 2025, some 200 of which will be grounded this year. Collectively, the moves point to a much smaller operating fleet at both Delta and its peers as people’s reticence to travel proves difficult to kick amid a byzantine network of quarantine requirements and the absence of a widely available vaccine. Already, Delta is 20% smaller overall than it was at the beginning of the year, CEO Ed Bastian said on a call to discuss the earnings.