Airlines last week globally cut 21 million seats, or 23 percent of capacity, even before the steep reductions planned by large U.S. carriers begin this week, according to OAG analysis.
The biggest share of last week's cuts was in Europe, with five airlines in the region slashing capacity by more than 60 percent week over week, including Ryanair (down 83.9 percent), SAS Scandinavian Airlines (down 82.6 percent), Iberia (down 75.4 percent), Turkey's Pegasus Airlines (down 73.2 percent) and Lufthansa (down 68.9 percent), according to OAG analyst John Grant. By country, the largest cuts in terms of number of available seats last week were in Peru, Portugal, Spain, Finland and Denmark. Some countries that had not yet seen significant capacity cuts, including Brazil, India and Indonesia, began seeing them last week, he said.
Over the past 10 weeks, airlines globally have cut 35 percent of capacity, representing about 37 million total seats, according to OAG.
The data next week could be "as bad as this week if not worse," Grant said, as the U.S. carriers still are working through their own recently announced cuts. Over the past 10 weeks, the four largest scheduled airlines in the world were the U.S. Big Three and Southwest Airlines—which, with last week's capacity down only 0.1 percent week over week, has outpaced United Airlines in capacity.
In a research note, Cowen analyst Helane Becker said U.S. carriers soon will have to make drastic job cuts, projecting that Delta Air Lines will furlough about 60,000 people and United about 40,000 people, using the estimate of 98 employees per aircraft.
"The situation remains fluid, but pragmatically, the airlines can't hold off making tough decisions any longer," according to Becker. "Management is trying not to take such drastic measures, but without government help, it doesn't make sense to churn through cash—Delta noted its cash burn is $50 million per day—to keep people on board that won't be needed for at least one to two years after the recovery starts."
Bank of America now projects U.S. carriers will see revenues for 2020 drop 36 percent year over year.
As China recovers from the outbreak, its domestic capacity is rebounding, with 217,000 domestic seats added back last week, Grant said. Once the U.S. begins to see recovery, Becker said it would take 12 to 18 months for the industry to get back to its previous growth rate.
"Leisure travelers likely won't have the money to take vacations, and corporate travel will be slow to return," she said.