United Airlines is deepening its planned domestic capacity cuts as Delta Air Lines and American Airlines on Tuesday each announced its own capacity reduction plans due to the Covid-19 outbreak.
Delta is reducing international capacity by up to 25 percent and domestic capacity by up to 15 percent, the carrier announced. Transpacific capacity will be down 65 percent, and transatlantic capacity will decrease as much as 20 percent. Routes to Latin America have the smallest reduction planned, down 5 percent.
The capacity reductions are in addition to other cost-cutting measures, including a companywide hiring freeze, parking aircraft, pushing up retirements of older aircraft and deferring $50 million in capital expenditures, according to Delta.
American Airlines announced a 10 percent cut in its international summer capacity, including a 55 percent reduction on Pacific routes. On domestic routes, it has cut capacity by 7.5 percent for April, on routes with "robust schedule patterns" where travelers can be easily re-accommodated, according to the carrier.
United, which already announced capacity cuts of 20 percent in international routes and 10 percent in domestic and Canadian routes for April, now also expects to cut May capacity by 20 percent and "proactively evaluate and cancel flights on a rolling 90-day basis" until there are signs of a demand recovery, according to an SEC filing. Both CEO Oscar Munoz and president Scott Kirby, who is scheduled to take over as CEO in May, are both forgoing their full base salaries through at least June 30, according to the filing.
All three of the largest U.S. carriers now are waiving change fees on any tickets for travel through April 30.
Amid the coronavirus outbreak, airlines around the world are enacting similar measures as the industry enters "unprecedented territory," according to a research note by Cowen's Helane Becker. Qantas, for one, is cutting international capacity by about 25 percent over the next six months, largely on routes from Australia to Asia and the United States. Most of the carrier's Airbus A380 fleet will be grounded, and CEO Alan Joyce will forgo his salary. Air France-KLM is cutting its European network by 25 percent and its long-haul network by 13 percent, and the group plans to cancel 3,600 flights this month.
"Companies continue to curtail business travel domestically and internationally, and we expect these travel bans to last through April, and likely into May," Becker wrote. "We believe that once the number of new novel Covid-19 viruses peak, and travelers return to the skies, airlines will discount ticket prices to the leisure customer to schedule demand."