Delta's CEO said he would support an 'immunity passport' program or other steps to jumpstart travel as the airline reports its first quarterly loss in more than 5 years

• Delta Air Lines CEO Ed Bastian said the carrier would explore a wide range of options to reassure passengers and help jumpstart air travel as the coronavirus pandemic begins to subside.
• Bastian said options could include an "immunity passport" system, or lower load factors on planes to enable social distancing among passengers — with a corresponding increase in ticket prices.
• The comments came during a conference call with analysts discussing Q1 2020 results. The airline lost $534 million in the first quarter of the year, mostly toward the end, and expects significantly worse performance for the second quarter.
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Delta CEO Ed Bastian said on Wednesday the airline would investigate and support a wide range of possible measures to help jump-start air travel during a recovery that he expects will be "choppy" and take two to three years.

Bastian's comments came during a call with analysts discussing the airline's financial results for the first three months of 2020.

Delta posted its first quarterly loss in more than five years due to the coronavirus pandemic, with a net loss of $534 million for the quarter ending March 30. Revenues of $8.6 billion were down 18% from last year.

The loss was less severe than a $2.1 billion loss announced by United Airlines in a Securities and Exchange Commission filing on Monday, but in a memo to staff, Bastian warned that the second quarter looked bleaker, with revenue projected to fall 90%.

Airlines around the world have lost massive amounts of cash as the contagion brought air travel to a virtual halt. Airlines have cancelled flights, suspended routes, and grounded planes, and the aircraft that are still flying are often nearly empty. Bastian previously said that the airline is losing as much as $60 million each day, increasing to $100 million by the end of the quarter. He said on Wednesday that the airline is flying 95% fewer passengers with 85% less capacity.

The airline has about $6 billion in liquidity, according to chief financial officer Paul Jacobson, who delayed his planned retirement to help the airline through the crisis. The airline raised $5.4 billion in capital in March through several measures including loans and aircraft leasebacks, and drew from an existing credit facility.

"The decade of work we put into the balance sheet to lower debt and build unencumbered assets has been critical to our success in raising capital and we expect to end the June quarter with approximately $10 billion in liquidity," Jacobson said in a release.

Delta also expects to receive about $5.4 billion in payroll aid from the federal government, $1.6 billion of which would take the form of an unsecured low-interest loan. It received the first $2.7 billion of that on Monday.

It also plans to apply for up to $4.6 billion in secured loans under the federal CARES Act, but would not immediately draw down the loans. Airlines have until September to access credit granted under the loan program.

Jacobson said the airline's daily cash burn would fall to about $50 million by June as it explores further cost-cutting measures, including offering voluntary leaves to employees and delaying capital expenditures.

Bastian said that it could take two to three years for the airline's business and revenue to return to pre-pandemic levels, as the outbreak is contained and consumer confidence returns.

He said that the airline would support various measures to try and encourage travel to resume as quickly as possible, including supporting an immunity passport program.

"When you ask people what the most important thing is to get them to start traveling, it's confidence in their safety," Bastian said. "We have medical advisors that we work with, and we'll continue to work with to help them translate the return of business to where people feel safe."

"We'll make whatever changes to the business model that will be necessary," he added.

One option that has been discussed among public health professionals is an "immunity passport" or certificate, certifying that a person has developed antibodies to the virus and can no longer transmit it to others or develop symptoms.

Widespread antibody testing would be required for such a system to work, and it is unclear whether this would be feasible in practice. It would also require a significant workforce to administer.

Bastian suggested that virtually all options were on the table as well, including selling fewer tickets for each flight once travel begins to return to enable social distancing on planes. The remaining tickets would likely be priced higher to make up for the fewer seats sold.

"We're going to spend the time in these next few months to build the company we want for the future," he said, "and we'll be asking consumers those questions."

"We'll have opportunities to test all these theses to see what it takes to inspire confidence in air travel and the safety," he added. "Maybe it's waiting for a vaccine in two years, I don't know. But there's a host of ideas and options that we're exploring, and we'll do whatever it takes to make sure that we get our business model not just back to where it was, but improved.

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