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Delta Air Lines Sees 80% Drop in Second-Quarter Revenue as Coronavirus Stalls Travel Demand

Delta Air Lines Inc. (DAL), expects an 80% decline in revenues for the second quarter as the outbreak of the coronavirus curtails travel around the world.

As a result of the sharp drop in travel demand, the airline is projecting second-quarter revenues will be slashed by $10 billion, or 80%, compared to the same period a year ago. The company is burning about $50 million in cash each day, CEO Ed Bastian, wrote in a letter to employees.

Analysts’ recommendations on the stock show a mixed picture, with 4 Buy ratings and 6 Hold ratings resulting in a Moderate Buy for the airline. The average price target of $58.75 could provide returns of 175% in the next 12 months. (See Delta stock analysis on TipRanks)

In addition, Delta announced that it secured a $2.6 billion credit line to strengthen its cash position in coming weeks and months. Share repurchases have been halted and the company’s board of directors voted to suspend future dividend payments.

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