U.S. Carriers Unveil Sweeping Capacity Cuts Following Schengen Travel Ban

14.03.2020

Aviationweek.com :

U.S. Carriers Unveil Sweeping Capacity Cuts Following Schengen Travel Ban

American Airlines and Delta Air Lines announced massive new international capacity cuts to Europe and South America, following U.S. President Donald Trump’s decision to bar most inbound travel from Europe over concerns about the spread of COVID-19.

In a company-wide memo sent Mar. 13, Delta CEO Ed Bastian told employees the airline would cut systemwide capacity by 40% “in the next few months,” which he called “the largest capacity reduction in Delta’s history, including 2001.” 

The 40% target goes well beyond Delta’s previously announced 15% capacity cut, which occurred prior to the proclamation banning travel from Europe’s 26-country Schengen Area. 

“The speed of the demand fall-off is unlike anything we’ve ever seen—and we’ve seen a lot in our business,” Bastian said, adding that net bookings for the next four weeks have turned negative, indicating more cancellations than new bookings. “With revenues dropping, we must be focused on taking costs out of our business.”

To manage the reduced capacity, Bastian said Delta would be parking up to 300 aircraft—roughly a third of its mainline fleet—while deferring all new aircraft deliveries to preserve cash. That echoes recent comments from United CEO Oscar Munoz, who told investors on a webcast hosted by J.P. Morgan Chase that United will “not be taking delivery of even a single aircraft ... unless it is fully financed until the crisis is over.”

Bastian said Delta will be reducing CAPEX by at least $2 billion in 2020, including by delaying aircraft modifications and IT initiatives. He also announced that he would forgo his entire salary, effective immediately, for the next six months.

As a result of the ban on travel from the Schengen Area, Delta will suspend flights to Paris Charles De Gaulle Airport (CDG) from Cincinnati, Indianapolis, Minneapolis/St. Paul (MSP), Raleigh-Durham and Salt Lake City. It will also suspend routes to Amsterdam Schiphol (AMS) from Orlando, MSP and Portland, Oregon.

American Airlines also announced extensive route cuts on Mar. 13, unveiling plans to reduce summer season capacity by 34%, more than double its prior estimate of 15%, encompassing cuts to Europe as well as South America—making it the first U.S. carrier to trim international capacity to the Latin American region as a result of the crisis.

American’s European cuts will include flights from Charlotte and Philadelphia—both non-approved gateways for inbound Schengen Area travel—to destinations including AMS, Frankfurt (FRA), Madrid, Munich (MUC) and Zurich (ZRH). 

Suspended South American routes include service to Buenos Aires and Cordoba, Argentina from Miami, New York JFK, Dallas-Fort Worth (DFW) and Los Angeles International (LAX)—effectively halting the carrier’s service to Argentina for the time being. Routes from DFW and LAX to Sao Paulo and from DFW to Santiago, Chile will also be suspended.

United Airlines has not made any public announcements yet regarding route cuts, but a company spokesman gave Aviation Daily a preview of what to expect in the coming days.

The United spokesman said the carrier would continue flying its regular schedule from Europe to the U.S. through Mar. 20. Following that date, the company expects to: fly daily to ZRH, Brussels, CDG, AMS, Manchester and Edinburgh; maintain multiple flights to FRA and MUC; and operate 18 daily flights to and from London, three to Dublin and daily service to Lisbon. 
 


Ben Goldstein

Based in Washington, Ben covers Congress, regulatory agencies, the Departments of Justice and Transportation and lobby groups.

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