Delta reported a net loss of $5.7 billion in the second quarter as the Covid-19 pandemic led to a stunning 88% year-over-year decline in operating revenue.

Nevertheless, the carrier ended the June quarter with $15.7 billion in liquidity, enough to operate for 19 months based upon current cash burn levels of $27 million per day.

On an earnings call Tuesday, Delta executives expressed confidence that they will make it through the pandemic, even though they believe it will be more than two years before the airline industry sees a sustainable recovery.

Delta has raised nearly $15 billion in financing since the onset of the pandemic at a blended interest rate of 5.5%. If need be, the company still has access to up to $4.6 billion in Cares Act government loans and could use additional unencumbered assets, including aircraft, to secure further private financing, according to CFO Paul Jacobson.

Demand at Delta has flattened in recent weeks as Covid-19 cases have spiked in the U.S., especially in Delta's home base of the South. Delta projects overall revenue for the third quarter will be 20% to 25% of last year's total. The carrier's seat availability this quarter will also be 20% to 25% of last year.

"That space onboard really matters, and customers are telling us that," said CEO Ed Bastian.

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For the second quarter, Delta reported passenger revenue of just $678 million compared with $11.37 billion a year earlier. Total revenue was $1.47 billion, off from more than $12 billion a year earlier.

Losses would have been far worse had the carrier not reduced operating expenses by $4.1 billion, or 40%, over the course of the quarter. Reduced operations, voluntary employee leave programs and low fuel prices all contributed to those reductions. Delta's daily cost basis is now down more than 50% since the start of the crisis, and the carrier expects that figure to remain steady as it increases flying.

Thus far, said Bastian, 17,000 employees have agreed to voluntary buyouts as Delta seeks to right-size its staff once Cares Act payroll grants expire at the end of September. He said Delta is hopeful that it can avoid layoffs.

The carrier's goal is to be operating a daily break-even rate by the end of the year, which will need to be achieved by increased revenue. Bastian said he is optimistic that demand will improve in the late summer or early fall, assuming that the Covid-19 spike subsides.

Delta stock was down approximately 2.5% in midday trading. 

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