Delta Air Lines, Inc 8-K, filed Mar 18, 2020
Delta Air Lines, Inc. (DAL)
About this 8-K
Delta Air Lines, Inc filed this 8-K on March 18, 2020.
Items reported
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
(Address of principal executive offices)
Registrant’s telephone number, including
area code:
Registrant’s Web site address: www.delta.com
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).
Emerging
growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 7.01 | Regulation FD Disclosure. |
Delta Air Lines, Inc. (“Delta”) today released a memo from Ed Bastian, Delta’s Chief Executive Officer, to all employees of Delta. A copy of that memo is attached.
In accordance with general instruction B.2 of Form 8−K, the information in this report (including the exhibit) that is being furnished pursuant to Item 7.01 of Form 8−K shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act, as amended, or otherwise subject to liabilities of that section, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth in such filing. This report will not be deemed an admission as to the materiality of any information in the report that is required to be disclosed solely by Regulation FD.
Statements in this Form 8-K and the attached exhibit that are not historical facts, including statements regarding our estimates, expectations, beliefs, intentions, projections or strategies for the future, may be "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the estimates, expectations, beliefs, intentions, projections and strategies reflected in or suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to, the possible effects of accidents involving our aircraft; breaches or security lapses in our information technology systems; disruptions in our information technology infrastructure; our dependence on technology in our operations; the performance of our significant investments in airlines in other parts of the world; the restrictions that financial covenants in our financing agreements could have on our financial and business operations; labor issues; the effects of weather, natural disasters and seasonality on our business; the effects of an extended disruption in services provided by third parties; the cost of aircraft fuel; the availability of aircraft fuel; failure or inability of insurance to cover a significant liability at Monroe’s Trainer refinery; the impact of environmental regulation on the Trainer refinery, including costs related to renewable fuel standard regulations; our ability to retain senior management and key employees; damage to our reputation and brand if we are exposed to significant adverse publicity; the effects of terrorist attacks or geopolitical conflict; competitive conditions in the airline industry; interruptions or disruptions in service at major airports at which we operate; the effects of extensive government regulation on our business; the impact of environmental regulation on our business; the sensitivity of the airline industry to prolonged periods of stagnant or weak economic conditions; uncertainty in economic conditions and regulatory environment in the United Kingdom related to the exit of the United Kingdom from the European Union; and the effects of the rapid spread of contagious illnesses.
Additional information concerning risks and uncertainties that could cause differences between actual results and forward-looking statements is contained in our Securities and Exchange Commission filings, including our Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2019. Caution should be taken not to place undue reliance on our forward-looking statements, which represent our views only as of March 18, 2020, and which we have no current intention to update.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit 99.1 | March 18, 2020 Memo to Delta Colleagues Worldwide |
| Exhibit 104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL |
| 2 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
DELTA AIR LINES, INC.
| |
| By: /s/ Paul A. Jacobson | |
| Date: March 18, 2020 | Paul A. Jacobson, Executive Vice President and Chief Financial Officer |
| 3 |
Exhibit 99.1
Internal Memorandum
Date: Wednesday, March 18, 2020
| To: | Delta Colleagues Worldwide |
| From: | Ed Bastian, CEO |
| Subject: | Protecting Delta’s Future |
As the COVID-19 (coronavirus) pandemic progresses globally, its impact on our business continues to grow. To contain the virus, social distancing has become widespread and new travel directives are being enacted, now including more than 40 nations worldwide.
First and foremost, I want to remind everyone of the importance of your health and safety. It is safe to travel, but always make sure you are taking the necessary steps to ensure your health and that of our customers and our people. The CDC has important guidelines available, so please follow all necessary precautions.
Following the national emergency that was declared by the U.S. President, demand for travel has dropped significantly. Revenue for the month of March is now expected to decline by almost $2 billion over last year, with our projection for April falling even more. Therefore, we will continue to make significant capacity reductions with a 70 percent systemwide pullback planned until demand starts to recover. Our international operation will take the largest reduction, with over 80 percent of flying reduced over the next two to three months.
We are having constructive discussions with the White House and Congress, and remain optimistic that our industry will receive support to help address this crisis. That said, we have to continue to take all necessary self-help measures. Cash preservation remains our top financial priority right now. Making swift decisions now to reduce the losses and preserve cash will provide us the resources to rebound from the other side of this crisis and protect Delta’s future.
We are deferring nearly all of our capital spending, including all new aircraft deliveries, until we have better clarity on the duration and severity of the situation.
In addition, we are looking to secure more than $4 billion in cash savings in the June quarter alone. This will include capacity-related savings as we suspend flying, and we are also targeting expense reductions from:
| · | All Delta officers will take a 50 percent pay cut through June 30, with directors and managing directors taking a 25 percent cut during that same period. |
| · | As I mentioned last week, I’ve cut my own salary by 100 percent through the next six months. Our Board of Directors elected to forego their compensation over the next six months as well. |
| · | With fewer customers flying, we need less space in airports. Among other initiatives, we will temporarily consolidate airport facilities in Atlanta and other locations as necessary and close the majority of our Delta Sky Clubs until demand recovers. |
| · | We are reducing our active fleet size by parking at least half of our fleet – more than 600 aircraft. We also will be accelerating retirements of older aircraft like our MD-88/90s and some of our 767s. |
| · | We are reducing any maintenance spend that is not necessary to support the safety of our operation. |
| · | We have reduced most contractor spend, except where needed to support the operation. |
| 1 |
Voluntary leaves are one of the best and most immediate ways you can help as we strive to protect jobs and pay. I want to thank each of the roughly 10,000 Delta people who have already volunteered and I urge everyone, especially our merit employees, to seriously consider whether a temporary leave makes sense for you and your family right now. Please remember that you will continue to have access to your health and flight benefits while on leave.
As we draw down our operation, I know how painful it is to essentially hit the “pause button” on so many things that are core to what we do for our customers and our mission to connect the world. But what will never stop is the spirit of the Delta people, which is shining through brighter than ever even in this dark moment. I have received hundreds of emails and messages from my Delta colleagues over the past week, and your passion, commitment and confidence in our future is truly inspiring.
In particular I want to thank the Reservations and Customer Care team, who are doing incredible work managing an unprecedented volume of calls and taking care of our customers who need to adjust their travel plans.
Make no mistake – we will get through this. This is a temporary health crisis and an end will, hopefully soon, be in sight. Never underestimate the power of travel as an essential service to our world. All of our work over the past decade to fortify our company and transform our business model will serve us well in the weeks and months ahead, as we endure and, eventually, recover.
Please continue to make the health and safety of each other and our customers our top priority. Wherever possible, we are moving to have our people work remotely to reduce the risk of transmission. For those working in the operation, continue to always follow our safety and security guidelines to minimize distractions, and call a safety time-out when needed. And please be mindful in your personal lives to take steps to protect yourself and your loved ones, including social distancing and recognition of those who are most vulnerable, including the elderly and those in poor health. Be aware that if your doctor advises you to stay home because you may have been exposed to COVID-19, you will be paid and won't have to deduct that time from your PPT bank.
I know everyone is concerned about the security of your jobs and pay. Given the uncertainty about the duration of this crisis, we are not yet at a point to make any decisions. And those are very painful decisions to even consider. But know that my No. 1 priority is taking the very best care of all of you. In this unpredictable environment we can’t take any options off the table, but any steps that would affect your jobs or pay rates would be the absolute last thing we would do, and only if necessary to secure Delta’s long-term future.
I will be in touch again by the end of the week with additional updates as we navigate this together. Thank you for all you are doing for each other, for our customers, and for your communities and your loved ones in this unprecedented time.
Ed
| 2 |