Delta Air Sees Charge of Up to $2.5 Billion on Jet Retirements
(Bloomberg) -- Delta Air Lines Inc. warned it would take a pretax accounting charge of $2 billion to $2.5 billion after deciding to remove three aircraft types from its fleet amid an unprecedented collapse in air travel.
The noncash impairment will be recorded in third-quarter results, which are due next month, Delta said in a regulatory filing Friday. The company will retire its Boeing Co. 717-200 jets and remaining 767-300ER planes by December 2025. Before that, by December 2023, Delta will remove its Bombardier Inc. CRJ-200 regional jets.
The aircraft retirements are “intended to streamline and modernize Delta’s fleet,” the company said in the filing. With travel demand upended by the coronavirus pandemic, airlines around the world have parked jets and hastened aircraft retirements as they hunker down for an uncertain recovery.
The impairments come on top of a pretax charge Delta previously announced for the third quarter of $2.7 billion to $3.3 billion because of programs to offer employees voluntary retirement and separation. About 17,000 Delta employees have left the company voluntarily, and 40,000 have taken unpaid leave of varying duration.
Delta decided earlier this year to permanently park its fleet of 18 Boeing 777 jets by the end of this year, and accelerated the retirements of its MD-88 and MD-90 aircraft and some Boeing 767 planes.
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