As virus reduces travel, airlines cut flights

Normally airlines try to lure reluctant travelers by cutting fares, but that won’t work with the COVID-19 outbreak

Update: 2020-03-11 05:37 GMT
Representational image (AFP)

Airlines are slashing flights, freezing hiring and parking planes to cope with a stunning drop in bookings and a rise in cancellations caused by fear over the new virus outbreak.

Southwest Airlines CEO Gary Kelly says the outbreak might be worse for airlines than the terror attacks of 2001. An industry trade group believes it will be more damaging.

Delta Air Lines said on tuesday that travel demand has fallen so sharply in the past week that it expects one-third of seats to be empty this month on flights within the United States, which was insulated from virus fallout for a time.

United Airlines expects to lose money in the first quarter for the first time in six years.

United said ticket sales in the U.S. have dropped 25% in recent days, 70% after subtracting cancellations  and it’s even worse in Asia and Europe.

Delta, the world’s biggest airline by revenue, said net bookings declined 25% to 30% in the past two weeks and could get worse.

It will cut international flights by 20% to 25% and reduce U.S. flying by 10% to 15%, roughly matching cuts previously announced by United Airlines.

Delta is parking some planes, cutting spending, freezing hiring, offering voluntary unpaid leave, delaying voluntary pension contributions and suspending share buybacks.

American Airlines announced it will cut international flying by 10% this summer and reduce U.S. flying by 7.5% in April. It has delayed training of new pilots and flight attendants.

The International Air Transport Association, an airline trade group, estimates that the outbreak could reduce carriers’ revenue by between $63 billion and $113 billion depending on how far and deep it spreads.

The demand drop-off that began in Asia picked up steam in the U.S. about two weeks ago, when the virus spread outside Asia, notably to Italy.

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