Delta Air CEO reiterates cash flow target in ‘year of recovery’

Delta Air Lines Inc.’s Chief Executive Officer Ed Bastian reiterated the carrier’s aim to achieve positive cash flow by the spring as it plans for a “year of recovery.”

He warned that travel demand will remain “deeply depressed” initially, with the company’s focus on health and safety for passengers. A “significant” resumption of travel, particularly for business, will come when vaccines become widely available, he said in a memo marking the new year.

“As difficult as 2020 was, in many ways I expect the next 12 months to be even more challenging,” he said, predicting that vaccinations will mark the turning point for the industry. “While I am optimistic this will be a year of recovery, the continued uncertainty of the pandemic means we’ll need to be nimble, ready to adjust our course and adapt to an ever-changing environment.”

Bastian last reiterated the spring target for cash flow on Dec. 8.

Delta shares dropped 31% in 2020, compared with the 16% gain in the S&P Index.

The U.S. travel industry is preparing for a rebound in demand with the arrival of vaccines. After months of deep discounts—with hotels offering lavish perks and airlines dangling fares as low as $21 from New York to Florida—prices are set to make up at least part of the ground they lost.

Trip providers have slashed capacity, so any gains in bookings will tend to boost rates. And as vaccines take hold, they’re poised to unleash a torrent of pent-up vacation demand as people emerge from months of being cooped up at home. That’s leading to optimism within the industry for an upswing in the spring and summer, even as rates remain depressed and a recovery in business travel is a long way off.

The carriers also got a bump with travel around Thanksgiving and year-end holidays, as passengers going through U.S. airport screening reached the highest levels since the start of the pandemic.