Delta retires Boeing 777s, expects charge of $1.7B
Airline to rely on Airbus seen as cost-effective and more fuel-efficient
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 (U.S.), Delta said in a regulatory filing Thursday.
The airline will rely on its “more fuel-efficient and costeffective” 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 longhaul 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 shares were down 0.15 per cent to close at $19.38 in New York.
The airline’s shares tumbled 67 per cent this year through Wednesday, while the S&P 500 dropped 13 per cent.
The same week that five U.S. senators introduced legislation to give customers full cash refunds for any flight cancelled during the coronavirus outbreak, Delta said it had returned more than $1.2 billion to passengers since the pandemic began.