ATLANTA, July 14, 2021 – Delta Air Lines (NYSE: DAL) today reported financial results for the June quarter 2021 and provided its outlook for the September quarter 2021. Highlights of the June quarter 2021 results, including both GAAP and adjusted metrics, are on page six and are incorporated here.
June Quarter Financial Results
Adjusted pre-tax loss of $881 million excludes $1.5 billion of benefit related to the first and second payroll support program extensions (PSP2 and PSP3, respectively) and mark-to-market adjustments on our investments
Adjusted operating revenue of $6.3 billion, which excludes refinery sales, declined 49 percent on 39 percent lower sellable capacity (see Note A) versus June quarter 2019
Total operating expense, which includes $1.5 billion of benefit related to PSP2 and PSP3, decreased $4.1 billion relative to the June quarter 2019. Adjusted for the benefit related to the PSP programs and third-party refinery sales, total operating expense decreased $3.3 billion or 32 percent in the June quarter 2021 versus the comparable 2019 period
Generated $1.9 billion of operating cash flow, $1.5 billion of free cash flow and $195 million of free cash flow, adjusted in the June quarter
At the end of the June quarter, the company had $17.8 billion in liquidity, including cash and cash equivalents, short-term investments and undrawn revolving credit facilities. The company had total debt and finance lease obligations of $29.1 billion with adjusted net debt of $18.3 billion
Click the link below to read the full release, including the reconciliations of GAAP to non-GAAP financial measures:
Financial results significantly impacted by COVID-19, 737 MAX grounding, and commercial widebody programs
777X program recorded $6.5 billion pre-tax charge; first delivery expected in late 2023
737 MAX began receiving regulatory approval to resume operations and restarted deliveries
Revenue of $15.3 billion, GAAP loss per share of ($14.65) and core (non-GAAP)* loss per share of ($15.25)
Full-Year 2020
Revenue of $58.2 billion, GAAP loss per share of ($20.88) and core (non-GAAP)* loss per share of ($23.25)
Operating cash flow of ($18.4) billion; cash and marketable securities of $25.6 billion
Total backlog of $363 billion, including more than 4,000 commercial airplanes
Strengthening safety processes, improving performance, managing liquidity and transforming for the future
Table 1. Summary Financial Results
Fourth Quarter
Full Year
(Dollars in Millions, except per share data)
2020
2019
Change
2020
2019
Change
Revenues
$15,304
$17,911
(15)%
$58,158
$76,559
(24)%
GAAP
Loss From Operations
($8,049)
($2,204)
NM
($12,767)
($1,975)
NM
Operating Margin
(52.6)%
(12.3)%
NM
(22.0)%
(2.6)%
NM
Net Loss
($8,439)
($1,010)
NM
($11,941)
($636)
NM
Loss Per Share
($14.65)
($1.79)
NM
($20.88)
($1.12)
NM
Operating Cash Flow
($4,009)
($2,220)
NM
($18,410)
($2,446)
NM
Non-GAAP*
Core Operating Loss
($8,377)
($2,526)
NM
($14,150)
($3,390)
NM
Core Operating Margin
(54.7)%
(14.1)%
NM
(24.3)%
(4.4)%
NM
Core Loss Per Share
($15.25)
($2.33)
NM
($23.25)
($3.47)
NM
*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures Disclosures.”
The Boeing Company [NYSE: BA] reported fourth-quarter revenue of $15.3 billion, reflecting lower commercial deliveries and services volume primarily due to COVID-19 as well as 787 production issues, partially offset by a lower 737 MAX customer considerations charge in the quarter compared to the same period last year (Table 1). GAAP loss per share of ($14.65) and core loss per share (non-GAAP)* of ($15.25) reflected a $6.5 billion pre-tax charge on the 777X program and a tax valuation allowance, partially offset by a lower 737 MAX customer considerations charge. Boeing recorded operating cash flow of ($4.0) billion.
“2020 was a year of profound societal and global disruption which significantly constrained our industry. The deep impact of the pandemic on commercial air travel, coupled with the 737 MAX grounding, challenged our results. I am proud of the resilience and dedication our global team demonstrated in this environment as we strengthened our safety processes, adapted to our market and supported our customers, suppliers, communities and each other,” said Boeing President and Chief Executive Officer Dave Calhoun. “Our balanced portfolio of diverse defense, space and services programs continues to provide important stability as we lay the foundation for our recovery. While the impact of COVID-19 presents continued challenges for commercial aerospace into 2021, we remain confident in our future, squarely-focused on safety, quality and transparency as we rebuild trust and transform our business.”
The return to service of the 737 MAX in the U.S. and several other markets was an important step, and Boeing continues to follow the lead of global regulators and support its customers. Since the FAA’s approval to return to operations, Boeing has delivered over 40 737 MAX aircraft and five airlines have safely returned their fleets to service as of January 25, 2021, safely flying more than 2,700 revenue flights and approximately 5,500 flight hours.
Boeing now anticipates that the first 777X delivery will occur in late 2023. This schedule, and the associated financial impact, reflect a number of factors, including an updated assessment of global certification requirements, the company’s latest assessment of COVID-19 impacts on market demand, and discussions with its customers with respect to aircraft delivery timing.
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WASHINGTON (Reuters) – The U.S. government on Wednesday said it would maintain 15% tariffs on Airbus <AIR.PA> aircraft and 25% tariffs on other European goods, despite moves by the European Union to resolve a 16-year-old dispute over aircraft subsidies.
U.S. Trade Representative Robert Lighthizer (USTR) said the EU had not taken actions necessary to come into compliance with World Trade Organization decisions, and Washington would initiate a new process to try to reach a long-term solution.
USTR said it would modify its list of $7.5 billion of affected European products to remove certain goods from Greece and Britain and add an equivalent amount from Germany and France.
It ignored calls from EU officials and U.S. lawmakers to drop tariffs on EU food, wine and spirits, but did not add tariffs to vodka, gin and beer as it had threatened.
Airbus said it “profoundly regrets” the U.S. decision to keep tariffs in place on its aircraft.
Washington’s decision to refrain from increasing the tariff rates would help prevent a further escalation, an EU official said, calling for intensified efforts to resolve trade conflicts between the powerful economic blocs.
EU trade commissioner Phil Hogan would continue his active engagement with Lighthizer to reach a negotiated settlement, the official said, noting that the current economic slowdown underscored the urgency of ending the conflict.
Last month, Airbus said it would increase loan repayments to France and Spain in a “final” bid to reverse U.S. tariffs and jog the United States into settling the long-running fight over billions of dollars of aircraft subsidies.
The United States declared itself in full compliance with WTO findings in May after Washington state abolished aerospace industry tax breaks that largely benefited Boeing.
Trade groups are bracing for an escalation of the row in the autumn when the EU is expected to win WTO approval to hit back with its own tariffs over subsidies for Boeing <BA>.
Airbus said in a statement it “trusts that Europe will respond appropriately to defend its interests and the interests of all the European companies and sectors, including Airbus, targeted by these tariffs.”
Boeing urged the EU and Airbus to launch prompt and “meaningful negotiations with the U.S. to address the full scope of their noncompliance and finally bring this case to an end.”
USTR in October 2019 imposed 25% tariffs on an array of EU food, wine and spirits, including Italian cheese and single-malt Scotch whisky in retaliation for EU subsidies on large aircraft.
It initially imposed 10% tariffs on Airbus aircraft but hiked that to 15% in March.
(Reporting by Andrea Shalal, David Lawder, David Shepardson and Eric M. Johnson; Editing by Chris Reese, Richard Pullin and Tom Brown)
At a little-known cargo airline that handles shipments for United Parcel Service Inc. and Amazon.com Inc., business is booming.
With passenger carriers forced to cut most of their freight capacity during the pandemic, seven-year-old Western Global Airlines LLC has picked up new orders amid a surge in online shopping.
Now, it’s benefiting from another big tailwind: the credit rally sparked by the Federal Reserve’s unprecedented backstop.
The Estero, Florida-based carrier is borrowing hundreds of millions of dollars from the junk-bond market to fund a stock program that will give it a sizable tax break, hand the founders a large payout and potentially keep its workforce union-free.
PARIS (Reuters) – Europe’s Airbus <AIR.PA> said on Friday it would increase loan repayments to France and Spain in a “final” bid to reverse U.S. tariffs and jog the United States into settling a 16-year-old dispute over billions of dollars of aircraft subsidies.
The European Union, France and Spain said the move to raise interest rates paid by Airbus on A350 aircraft development loans should settle the row at the World Trade Organization and urged Washington to withdraw tariffs on EU goods.
“In the absence of a settlement, the EU will be ready to fully avail itself of its own sanction rights,” EU Trade Commissioner Phil Hogan said.
The loans are part of a system targeted by the United States in the world’s largest corporate trade dispute, which has also aired condemnation of U.S. support for Boeing <BA>.
The United States last year won WTO authorization to impose tariffs on up to $7.5 billion of EU goods from wine to whisky.
Trade groups are bracing for an escalation of the row in the autumn when the EU is expected to win WTO approval to hit back with its own tariffs over subsidies for Boeing.
Allegiant Travel Company (NASDAQ: ALGT) today announced plans to establish a base of operations at Concord-Padgett Regional Airport (USA). The Las Vegas-based company will invest $50 million to establish the new base in Concord, creating at least 66 high-wage jobs and housing two Airbus aircraft.
The company, which focuses on linking travelers in small-to-medium cities to world-class leisure destinations, plans to begin its base operations in Concord on October 7, 2020. Concord-Padgett Regional Airport will become the airline’s 21st aircraft base.
Located minutes from Charlotte, Concord is one of the nation’s fastest-growing cities, with a robust business infrastructure and a diverse workforce. Home to some of North Carolina’s top tourist destinations, including NASCAR’s famed Charlotte Motor Speedway and Concord Mills, the city boasts a historic downtown district and a wide variety of entertainment and leisure activities for visitors and local residents. Concord is the largest city in Cabarrus County, with a population of more than 94,000.
“Since Allegiant’s first flight from Concord-Padgett Regional Airport in 2013, their growth has been truly remarkable,” said Concord Mayor Bill Dusch. “We are very pleased that Allegiant has selected Concord for a new base of operations, which brings new jobs and travel opportunities for the citizens of Concord and the Charlotte region. We look forward to continue developing our partnership with Allegiant in the future.”
“We’re excited about making Concord a permanent base, and further establishing Allegiant as a hometown airline for this high-performance city,” said Keith Hansen, Allegiant’s vice president of government affairs. “With a growing and diverse population seeking affordable vacation travel, and as a regional destination for race enthusiasts, arts fans and more, Concord is an ideal location for an Allegiant base. Having locally-based operations will mean opportunities for expanded hours, as well as more – and more frequent – flight offerings for residents and visitors alike.”
“This decision reaffirms that what began as a wonderful opportunity for a growing destination has grown into a committed relationship,” said Concord-Padgett Regional Airport Aviation Director Dirk Vanderleest. “My staff and I are humbled by this opportunity and milestone for USA. We look forward to working hand in hand with Allegiant Air to ensure that both residents and visitors alike are recipients of excellent customer service and expanded vacation opportunities.”
“Allegiant took Cabarrus County’s tourism industry to the next level with commercial air service and we’re proud to offer our support as they continue to grow,” said Cabarrus County Convention and Visitors Bureau President & CEO Donna Carpenter. “Visitor spending reached over $469 millionin Cabarrus County in 2018. These enhancements will fuel that figure, generating tax revenues that will positively impact the local economy and quality of life in our community.”
Allegiant began operating at USA in 2013 and currently offers seven non-stop routes: one to the Mardi Gras City of New Orleans and six to premier Florida destinations, including Destin/Fort Walton Beach, Fort Lauderdale, Orlando/Sanford, Palm Beach, Punta Gorda and St. Pete-Clearwater. Since establishing service, Allegiant has flown more than one million passengers through Concord, including 353,000 in 2019 alone.
“Cabarrus County’s investment in Allegiant emphasizes the power of collaboration,” said Cabarrus CountyBoard of Commissioners Chair Steve Morris. “Our support of projects related to the Concord-Padgett Regional Airport boosts the economic stability of all municipalities in our county and throughout the region.”
Both the Concord City Council and Cabarrus County Commissioners approved three-year economic development grants for the expansion. Based on a portion of the increased tax investment, the grant amount from the City of Concord would not exceed $48,649 and $75,001 from Cabarrus County.
“The establishment of this base really reinforces Allegiant’s commitment to our community,” said Cabarrus Economic Development Existing Industry Director Page Castrodale. “It sends a message that Cabarrus County is the right place to do business.”
Allegiant, which employs more than 4,300 team members across the U.S., plans to immediately begin hiring pilots, flight attendants, mechanics and ground personnel to support the operations. The majority of the new positions are expected to offer salaries that are more than double the state’s average wage. Interested applicants may apply online.
FILE PHOTO: The corporate logo of Ford is seen at Brussels Motor Show
(Reuters) – Ford Motor Co <F> said on Wednesday its fourth quarter results will be hit by a pre-tax loss of about $2.2 billion (1.7 billion pounds) due to higher contributions to its employees pension plans.
The charge is largely related to a drop in discount rates, the company said, as that leads to an increase in the amount of money to be contributed for future pension benefits.
The U.S. automaker said it will record a $2 billion loss related to pension plans outside the United States and a $600 million loss associated with other post-retirement employee benefits plans globally.
However, the overall loss was offset by a $400 million gain associated with pension plans in the United States.
On an after-tax basis, the loss is expected to reduce Ford’s net income by about $1.7 billion in the fourth quarter. The loss will not impact the adjusted earnings per share as it is a special item, the company said.
(Reporting by Dominic Roshan K. L. in Bengaluru; Editing by Arun Koyyur)
JetBlue Founder David Neeleman Selects Salt Lake City as Headquarters for New Airline
America’s newest and perhaps most innovative airline does not yet have a name, or any airplanes. But it now has a headquarters.
David Neeleman’s startup will be based in Salt Lake City, where it plans to spend a capital investment of $3.2 million and create nearly 400 jobs over the next five years, according to local authorities. In return, the state offered tax rebates worth as much as about $1.1 million over five years.
“There’s a super strong technology base, and lower cost of living than California and some of the coastal areas,” Lukas Johnson, the airline’s chief commericial said in an interview. “We want to focus more on the technology aspect of the transportation side, and it makes a lot of sense. The tech sector is booming out here.”
MILAN (Reuters) – Italian tax authorities believe that Fiat Chrysler Automobiles <FCAU> underestimated the value of its U.S. business by 5.1 billion euros following Fiat’s phased acquisition of Chrysler, according to a company filing and a source close to the matter.
The audit, which concerns transactions dating back to 2014, could result in FCA having to pay back taxes for $1.5 billion, the source added, confirming a report by Bloomberg.
FCA said in its third-quarter report that the tax authorities had issued to the company a final audit report in October this year “which, if confirmed in the final audit assessment, could result in a material proposed tax adjustment related to the October 12, 2014 merger of Fiat SpA into FCA NV.”
It said the issuance of a final audit report starts a 60-day negotiation period, which ends with the issuance of a final audit assessment expected to be received by the end of December 2019.
“The company believes that its tax position with respect to the merger is fully supported by both the facts and applicable tax law and will vigorously defend its position,” it said in the third-quarter report.
A spokesman for Italy’s tax agency declined to comment.
“At this time, we cannot predict whether any settlement may be reached or if no settlement is reached, the outcome of any litigation. As such, we are unable to reliably evaluate the likelihood that a loss will be incurred or estimate a range of possible loss,” Fiat said.
News of the tax probe comes at a delicate time for Fiat Chrysler, which is finalizing talks with PSA, the maker of Peugeot and Citroen, over a planned $50 billion merger to create the world’s fourth-largest automaker.
(Reporting by Silvia Aloisi in Milan; Editing by Anil D’Silva)
LOS ANGELES, November 11, 2019 – Air Lease Corporation (the “Company” or “ALC”) announced today that the Company initiated the sale of a portfolio of 19 aircraft to Thunderbolt III Aircraft Lease Limited (“Thunderbolt III”), a newly formed entity, and Thunderbolt III has now completed its equity and debt financing transactions. The aircraft comprise a mix of narrowbody and widebody jet aircraft that, as of August 31, 2019, had a weighted average age of 9.7 years and were leased to 18 lessees based in 15 countries. ALC and its Irish affiliate, ALC Aircraft Limited, will act as servicers with respect to the aircraft and ALC will act as portfolio manager. ALC estimates that the process of transfer and sale of the majority of aircraft will occur progressively during Q4 2019 and Q1 2020.
The Thunderbolt III structure included two series of Fixed Rate Notes and Equity Certificates. Approximately 15.6865% of the Equity Certificates were purchased by the anchor investor which is an investment vehicle managed by ITE Management L.P. and approximately 5% of the Equity Certificates were purchased by ALC.
Proceeds from the issuance of the Notes and the Equity Certificates will be used to acquire the aircraft, fund certain accounts for the Notes and pay certain expenses.
“We are pleased to announce the closing of Thunderbolt III. This transaction allows ALC to efficiently sell 19 aircraft while retaining the customer relationships through our continued management of these aircraft. I would like to thank our team and the Thunderbolt III investors for making this a successful transaction,” said Gregory B. Willis, Executive Vice President and Chief Financial Officer of ALC.
Mizuho Securities acted as Global Coordinator, Mizuho Securities, BofA Securities and Goldman Sachs & Co. LLC acted as Joint Lead Structuring Agents and Joint Lead Bookrunners, Wells Fargo Securities acted as Joint Lead Bookrunner, and BNP PARIBAS, Citigroup, J.P. Morgan, MUFG, RBC Capital Markets, SOCIETE GENERALE and SunTrust Robinson Humphrey acted as Passive Bookrunners (for the Notes) and Co-Managers (for the Equity Certificates).
Hughes Hubbard & Reed LLP acted as U.S. counsel to ALC and the Issuers, and Milbank LLP acted as U.S. counsel to the Global Coordinator, the Joint Lead Structuring Agents and the Joint Lead Bookrunners. EY acted as U.S. and Irish tax advisors. Walkers acted as Cayman Islands counsel and A&L Goodbody acted as Irish counsel. Vedder Price P.C. acted as counsel for ITE.
Canyon Financial Services Limited will act as the managing agent for the Issuers. Citibank, N.A. will act as trustee, security trustee, paying agent and operating bank. Wells Fargo Bank, N.A. will also act as the liquidity facility provider. DealVector, Inc. will provide certain investor services for the holders of the Notes and Equity Certificates.
