Delta Airlines Reduces Capacity Due to COVID-19

Winston ShekSTAFF | 03/11/2020

Delta Airlines will reduce capacity by 15% or more, according to many sources, due to the ongoing COVID-19 outbreak.

Delta declared Austin as a focus city, Credit: TheExplorerBlog | Daniel Mena

According to the carrier, they will be reducing Pacific capacity by 65%, transatlantic capacity by 10-15%, domestic capacity by 10-15%, and Latin American capacity by 5%.  The large reduction in Pacific capacity arrives after the suspension of all Chinese services and large reductions in service to Japan and Korea. Last year, Pacific flights made up 6% of the airline's revenue while transatlantic, domestic, and Latin American flights represented 15%, 72%, and 7% of revenue respectively.  The reductions in transatlantic capacity mainly come from the temporary suspension of flights to Italy and reductions to Europe across the board.

Additionally, the carrier is parking some aircraft and considering early retirements of aircraft.  This may be hinting at the early retirement of the carrier's aging MD-88 and MD-90 fleets which were scheduled to be retired this year and in 2022.

Also, the carrier will terminate hiring temporarily and offer voluntary leave.  Delta will also defer 500 million dollars in "capital expenditures" and delay 500 million dollars in voluntary pension funding.

The move comes after American, United, and Jetblue, announced that they would be cutting flights due to COVID-19, among others.  Additionally, American and United will park aircraft, similar to Delta Airlines. The situation is worsening for many airlines with United witnessing a 70% drop in bookings.

Delta has 11 A330-200's, Credit: Brady Noble

Delta is allowing customers to rebook without a fee for flights up until April 30th, due to the virus.

Delta CEO, Ed Bastain, states, "In the weeks since COVID-19 emerged, Delta people have risen to the challenge, taking every possible action to take care of and protect our customers during a stressful time. 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. 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."

What are your thoughts on the reductions?  Leave your thoughts in the comments below!!!

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