Question

What is the impact of COVID 19 on Delta airlines:

• Operations
• Supplies
• Employees
• Impact on stocks

Answer 1

The COVID 19 has impacted the airlines industry globally as many countries have imposed strict lockdown and has cancelled international flights. Also, the people are not travelling due to the pandemic scare. This has led to increase in cancellation of flight bookings and also decrease in new bookings which has led to grounding of aircrafts world over.

Effect on operations and supply of Delta Airlines:

As per the statement on its website, Delta Airlines has grounded around half of its active fleets which amounts to more than 600 airplanes. The international flights have been reduced by around 70 percent as various countries have banned international flights.The Company has taken a loss of USD2 billion in the month of March due to the cancellations due to Covid 19 crisis.

The Company has been flying some cargo only flights to Europe and also started them to China as it looks to diversify its operations due to fall in passenger traffic due to the outbreak.These are being used to mainly transport essential items.like medical supplies.

Effect on employees

The Company has taken measures to cut its costs which include pay cuts for its employees. The Company's Board of Directors have decided to forego their salaries for next 6 months and a 50% cut in salaries to the officers in the Company. The Company has also suspended various technology projects which has led to a loss of around 1300 vendor jobs in US and India.

Effect on share price

The Company's share price has gone down by over 50% since the start of the year. It is currently trading at around $24.4 while it was tarding at around $59 at the start of the year. This is because its operations have been hurt by the Covid 19 pandemic. It is also noteworthy that legendary investor Warren Buffet company Berkshire Hathaway has sold around 13 million stocks of Delta Airlines which will have an adverse impact on the sentiment around the Company's stock.

Overall, the airlines industry has been one of the worst affected due to the Covid 19 pandemic and it will take some time for the industry from this. Hence, the operations of Delta Airlines have also been adversely impacted and the Company has been in a cost saving mode to ensure survival in the face of this crisis.