Delta to retire Boeing 777 jets, sees up to $1.7 billion charge

Delta Air Lines Inc. will retire its Boeing Co. 777 jetliners, a mainstay of its long-distance fleet, as the carrier rushes to cut costs amid the unprecedented collapse of travel demand.

Removing the 18 twin-aisle behemoths by year-end, along with the previously announced retirement of smaller planes, will force an accounting charge of as much as $1.7 billion, Delta said in a regulatory filing Thursday. The airline will rely on its “more fuel-efficient and cost-effective” Airbus SE A350-900 and A330 planes to serve long routes.

“Retiring a fleet as iconic as the 777 is not an easy decision,” Delta Chief Executive Officer Ed Bastian said in a memo to employees. “The 777 played an important role with Delta since 1999, allowing us to open new long-haul markets and grow our international network as we transformed into a global airline.”Bastian said the retirement of the big Boeing jets would further Delta’s “principal financial goal” of slashing its daily cash burn to zero by year’s end from the current level of $50 million. In another cost-cutting effort spurred by the Covid-19 pandemic, the company said the number of employees who have agreed to take voluntary leave has now surpassed 41,000.

Delta fell 4.4% to $18.56 at 9:40 a.m. in New York as stocks slumped broadly in the U.S. for the third straight day. The airline’s shares tumbled 67% this year through Wednesday, while the S&P 500 dropped 13%.

The same week that five U.S. senators introduced legislation to give customers full cash refunds for any flight canceled during the coronavirus outbreak, Delta said it had returned more than $1.2 billion to passengers since the pandemic began. The amount includes $160 million so far this month, Delta said.