Delta Stock (NYSE: DAL) is currently going through a downturn because of the global pandemic situation. According to expert investors and analysts, the ideal time to invest in Air Lines stock is when the stock value is going through a downward fiscal graph. AirLines stocks are prone to a routine cyclicality in terms of stock value. So, if the stocks are facing a downturn now, they are bound to bounce back in a matter of time. But is it the correct time to invest in Delta Air Lines Stock?
The pandemic has slowed economic growth and has even hit the stock market biggies hard. The major blow and the complete travel ban for months on end has taken the Air Lines such as Delta stocks to a terrible low. According to recent stats, NYSE: DAL has approximately doubled off the low it has been facing. So, investors are currently considering whether it’s a yay or a nay to Delta stocks now.
Aviation Industry Hit Hard During Pandemic
There has been a complete collapse in the AirLines Industry since the early months of this year owing to the complete ban or air travel for leisure or for commercial purposes.
Compared to last year’s stats, leisure and commercial air travel is down by 50% and 88% respectively. So, AirLines stocks are finding themselves in deeper debt than ever. On a positive note, these US-based companies have received payroll grants of about $25 billion to control lay-offs and maintain paid leaves. Delta stocks have received $5.4 billion in the form of governmental aid in loans and grants. Delta stock has also decreased its cash burn to $18 million in September from an earlier $27 million cash burn during June.
If this aid continues in the second coronavirus relief package that the nation is negotiating for months now, then the AirLines industry can avoid massive furloughs. The terrible downturn can also begin to get reversed with the gradual opening up of industries and economies in the nation.
Delta Stock Facing A Huge Debt
Delta stock posted a 79% down in revenue in Q3 compared to consecutive quarter’s revenue in the previous year. The company suffered a loss of -$2.1 billion. Delta stocks even posted negative reports in the past two quarters of 2020 as well. The company further decreased its capacity by approximately 63% in the 3rd quarterly report.
However, the aviation industry is not set to face this doom forever. Likely, with a vaccine by the next year, normality is expected to return to the company’s revenue structure.
However, Delta stock is facing a huge debt of $9.0 billion. This is the largest in aviation history. The interest expense has also doubled to $601 million from $301 million. The uncertainty whether Delta Air Lines will be able to overcome this debt is making investors doubt their investment plan in Delta stocks currently.