US airlines cut more flights as demand plunges due to coronavirus outbreak

Major U.S. airlines announced more cuts to domestic flights Tuesday as demand continued to plunge amid the coronavirus outbreak.

The global airline industry could take a hit of up to $113 billion as passenger demand continues to decline, according to the International Air Transport Association.

United Airlines announced Tuesday that starting in May it anticipates it will cut at least 20 percent of flights until it sees signs of a recovery in demand. Last week, United was the first U.S. carrier to announce a cut to domestic flights, reducing its domestic schedule by 10 percent and international schedule by 20 percent for the month of April.

The airline is also offering employees a voluntary unpaid leave of absence and has instituted a hiring freeze through June 30.

United President Scott Kirby said that the airline’s domestic net bookings are currently down 70 percent, and that United officials are expecting “public concern about the virus to get worse before it gets better.”

“This is a crisis that’s going to have a large near-term impact on revenue,” Kirby said Tuesday at a J.P. Morgan 2020 Industrials conference.

In United’s “dire” scenario, the financial impact is worse than the post-9/11 decline in demand.

“We of course hope it will be better, but we’re not willing to count on that,” Kirby said.

According to a recent SEC filing, Kirby and United CEO Oscar Munoz will forgo 100 percent of their respective base salaries until at least June 30 of this year.

United Airlines Chief Communications Officer Josh Earnest says United is preparing for a longer recovery period than after the SARS outbreak, which took the airline 14 months.

“This is not a small thing,” Earnest told ABC News. “This is going to be a short-term event, but it’s going to be deep.”

United is currently estimating that coronavirus-related impacts will take 18 months of recovery time.

“Hopefully, by the time the summer rolls around, we will start to see a noticeable recovery,” Earnest said.

Delta Airlines officials said Tuesday they will reduce domestic capacity by 10 to 15 percent and international capacity by 20 to 25 percent. The carrier is joining United in instituting a company-wide hiring freeze and offering voluntary leave options.

Delta executives said Tuesday that developments over the past week have triggered the most uncertainty domestically.

“This clearly is not an economic event, this is a fear event, probably more akin to what we saw in 9/11 than necessarily what we saw in 2009,” Delta CEO Ed Bastian said. “I think you’re seeing a suspension of activities whether it be corporate activities, group activities, events where people get together in large numbers, all of which impact our demand sets.”

JetBlue CEO Robin Hayes echoed Bastian’s sentiments.

“This event is so similar to 9/11 in terms of the psychology driving it,” Hayes said. “You know it’s a fear-based event and the economics of the industry just literally a few weeks ago were very strong.”

JetBlue followed United last week, announcing that “in the near term” it will cut capacity by 5 percent.

American Airlines said Tuesday it will cut domestic flights by 7.5% and international flights “for the summer peak” by 10%.

Airlines for America (A4A), an industry trade organization that represents the major U.S. carriers, said after the cuts were announced that “domestic routes remain open for business.”

“The safety and well-being of passengers and crew is the top priority of U.S. carriers,” A4A officials said in a statement. “They will not fly anywhere deemed unsafe.”

All major U.S. airlines have issued some form of broad travel waiver allowing passengers to change or cancel flights without incurring a fee.

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