Delta Air Lines CEO on Q1 earnings, protecting employees and more

Delta Air Lines posts a smaller-than-expected loss of $422 million for the first quarter. Delta CEO Ed Bastian joins "Squawk on the Street" to discuss the earnings results and what he expects as the coronavirus crisis continues to hit airlines.

Delta Air Lines’ on Wednesday posted its first quarterly loss in more than five years and issued a bleak spring forecast as the coronavirus continues to sap travel demand.

Airlines are among the industries hit hardest by coronavirus and harsh measures to stop it from spreading, like stay-at-home orders. Carriers including Delta were granted a portion of $25 billion in government grants and loans dedicated to paying employees through Sept. 30.

The Atlanta-based carrier’s revenues plunged 18% in the first three months of the year to $8.6 billion. CEO Ed Bastian said second-quarter revenue will likely fall 90% from the same period of 2019 and forecast a long recovery, telling employees that the airline will be smaller in the future.

“We don’t know when it will happen, but we do know that Delta will be a smaller airline for some time, and we should be prepared for a choppy, sluggish recovery even after the virus is contained,” he wrote in a staff note. “I estimate the recovery period could take two to three years. I hope it’s sooner, but we need to be realistic in our planning.”

The airline spent the quarter shoring up cash and slashing expenses to combat the sharp drop in revenue. Delta’s is carrying about 5% of its normal passenger loads, Bastian told CNBC.

The carrier burned through $100 million a day at the end of March, a rate it expects to halve by the end of the second quarter.

Delta posted a net loss of $534 million for the first three months of the year. On an adjusted basis, Delta reported a per-share loss of 51 cents, compared with analysts’ estimates for a 70 cent per-share loss in the first quarter. Delta were down more than 1% in morning trading.

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