Delta is free to resume share buybacks, but won’t

Delta Air Lines Inc. says it’s not interested in buying back shares anytime soon, even though pandemic-related restrictions have finally ended.

“Our sole priority at Delta is to make sure that any excess cash that we’re generating is used to pay down debt, and we acquired a meaningful amount of debt during the pandemic,” Chief Executive Officer Ed Bastian said Thursday on a conference call to discuss quarterly results. “I don’t see any share repurchases happening here at Delta for the foreseeable future.”

US carriers received more than $50 billion in US support to stave off widespread layoffs and help prevent possible bankruptcies after travel demand was gutted early in the coronavirus pandemic. But the money came with rules on how it could be used, with share buybacks and dividends for shareholders banned through Sept. 30 of this year.

Delta received a total of $11.95 billion in three rounds of Payroll Support Program aid, including $8.46 billion in grants and nearly $3.5 billion in loans. The money was dedicated to helping offset labor expenses, and it prohibited involuntary furloughs and cuts in hourly pay. It also required airlines to keep flying to all the cities in their systems when the pandemic began.

“We want to get our investment grade rating back, so over the next couple of years and beyond, that will still be the top priority for any excess cash,” Bastian said. The carrier will also “continue to invest in the business and invest in our people.”