The coronavirus outbreak continued to take its toll on the travel industry, with the world’s largest airlines announcing cuts Tuesday to their seat capacity amid plummeting demand for air travel.
Delta, United and American Airlines have all announced cuts in capacity of as much as 65% on international routes and 15% on domestic routes, in addition to waiving fees for passengers who want to rebook their reservations to a future date.
The drop in demand has already prompted some airfare discounts for those willing to fly amid an outbreak that has killed more than 4,000 people worldwide, including 19 in the U.S., with thousands more infected.
“As the virus has spread, we have seen a decline in demand across all entities, and we are taking decisive action to also protect Delta’s financial position,” Delta Chief Executive Ed Bastian said in a statement Tuesday. “As a result, we have made the difficult, but necessary decision to immediately reduce capacity and are implementing cost reductions and cash flow initiatives across the organization.”
The cost reductions include a hiring freeze and a grounding of unused planes as well as delaying capital expenditures and buying company stock, Bastain said.
The reductions come after years of increasing demand for air travel thanks to a strong domestic economy, stable fuel prices and relatively cheap fares.
U.S. airlines have also benefited from a boost in international visitors flying to the U.S., although that has slowed slightly in the past year because of trade tensions with China and a strong U.S. currency, which made it more expensive for foreign travelers to visit here.
The cuts in capacity come at a time of year when leisure and business travel were expected to increase for the peak spring break travel season.
Airlines have just started to slash fares in response to the drop in demand, with steep discounts on routes to popular destinations like Hawaii, Vancouver, Las Vegas or Dallas. The travel website Hopper reported Tuesday that U.S. domestic airfares had dropped an average of 14% between March 4 and March 7 to $230 for round-trip flights.
The travel managers who book business trips for the country’s largest corporations say they have canceled nearly all business trips to China, Hong Kong and Taiwan, according to a survey of more than 1,000 companies by the Global Business Travel Assn. The survey also found that 13% of companies have canceled or suspended all domestic travel because of the outbreak.
“The impact to the business travel industry, and to the broader economy, cannot be underestimated,” Scott Solobrino, executive director of the Global Business Travel Assn., said in a statement.
Delta said it plans to cut domestic flight capacity by 10% to 15%, with trans-Atlantic routes cut by 15% to 20% and flights to Asia and the surrounding region by 65%. Capacity to Latin America will be cut by 5%. The Atlanta-based carrier did not specify the duration of the cuts except to say “the company will continue to make adjustments to planned capacity as demand trends change.”
American Airlines announced Tuesday it will cut international capacity “for the summer peak” travel season by 10%, including a 55% reduction in capacity on trans-Pacific routes. The Fort Worth-based carrier said it planned to cut domestic capacity in April by 7.5%. The airline extended its previous suspension of flights to mainland China and Hong Kong through the summer.
United Airlines said it planned to reduce its international and domestic schedule but did not say how much or how long the cuts would stay in place.
Southwest Airlines, along with most other major carriers, announced that it was enhancing its cleaning procedures on its planes to use “hospital-grade disinfectant throughout the aircraft” in hopes of convincing passengers that the cabins are safe.
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