Delta likely to pull flights as number of US coronavirus cases rises
Delta Air Lines is likely to pull some of its planned flights in August amid a surge in COVID-19 cases in U.S., a rise that comes even as other hard-hit nations in Asia and Europe show continued declines in new infections.
Ed Bastian, CEO of the Atlanta-based carrier, acknowledged the rise in coronavirus cases to staff and warned that the planned August schedule was "probably going to come down a little bit” during a virtual town hall on Thursday viewed by TPG. Delta had planned to fly as many as 2,000 daily flights by August, about double what it plans to fly next month.
"We don’t [want to] put more flying into a market than either what customer demand is or what our health advocates suggest in terms of keeping people at home as best we can," he said.
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The rise in coronavirus cases is a cause for concern both for airlines and the broader economy as localities begin to reopen after months of shutdowns. Many of the new cases are in southern and western states, including Arizona, Florida and Texas, where state government's were among the first to begin reopening after coronavirus closures.
As Cowen analyst Helane Becker put it in a report on Thursday, the recovery in air travel is "tenuous" at best as COVID-19 case numbers surge.
Traveler numbers have yet to reflect the rising case count. Transportation Security Administration (TSA) screenings continue to rise with 607,540 people passing through airport checkpoints on Monday, June 22. That's the first time above 600,000 since the virus hit flying hard in March, but still jut 22% of last year's numbers.
Cowen expects TSA screenings to remain above 600,000 over the upcoming July 4 holiday travel period.
But, heading into July, there are new warning signs about how the coronavirus might cause new problems for U.S. airlines.
Take for example the tri-state region of Connecticut, New Jersey and New York. The area was among the hardest hit in the pandemic's early days, causing restrictions to be placed on those leaving the region. Airlines drastically cut flight numbers there amid low demand.
Now, those states are seeing sustained declines in new cases following months of lockdowns. But, in a move to protect their residents from infection, they have implemented a mandatory 14-day quarantine for anyone traveling from nine states seeing a surge in cases.
Related: Delta Air Lines ‘committed’ to new Boston hub; Austin, Raleigh focus cities
Airlines, however, have not commensurately cut flights between those nine states and the New York City region as they did before. But the latest surge in cases has Cowen and other analysts warning of a potential new downdraft on demand for travel.
For now, representatives of American Airlines and United Airlines said the carriers are evaluating the quarantines but have made no schedule changes. In April, though, American slashed New York-area flights to as few as 13 a day and United to 17 flights a day.
Delta did not cut its schedules as much, flying as many as 50 flights a day to the region's three airports.
Related: US airlines may face a tough fall after that summer uptick
Elsewhere, Hawaii has extended its mandatory 14-day quarantine for arriving travelers through July 31. People arriving in Alaska must provide proof of a negative COVID test taken within the last three days or quarantine for 14 days.
Airlines are not taking the nascent recovery for granted. Executives acknowledge that planes are almost entirely filled with leisure travelers and not the lucrative business flyers that are needed to fill planes after summer holidays end over Labor Day weekend. Without a return in corporate travel, carriers may need to pull back schedules more than they normally do in the fall.
“It really is [that] there is just so much unknown,” Raymond James analyst Savanthi Syth said on the recovery earlier in June. “Airlines are putting the cash cushion in and hoping for the best.”
Related: State-by-state guide to coronavirus reopening
True to form, American just priced a new $2.5 billion bond at a whooping 11.75% interest rate — more than three-times what it paid on certain aircraft-backed bonds last year — in the name of raising cash. In addition, United has leveraged its MileagePlus loyalty program to raise as much as $5 billion to weather the crisis.
In a memo to Delta staff on Thursday, Bastian told them that wearing a mask onboard an airplane is "one of the most effective measures we have" against the virus. He has previously said that wearing a mask is a matter of "respect" for other people.
"Customers who choose not to comply with this or any other safety requirement risk losing their future flight privileges with Delta," said Bastian. "We have already banned some passengers from future travel on Delta for refusing to wear masks on board."
Related: Frontier bucks pandemic trend with growth, but says masks are a must
While a few cases of travelers refusing to wear masks has attracted media attention, airline executives say most flyers comply with the rules. Frontier Airlines CEO Barry Biffle told TPG in an exclusive interview this week that the carrier's bookings nearly doubled when they announced their mask rules.
Airlines and analysts are waiting with bated breath to see how the uptick in COVID-19 cases affects travel. Allegiant Air, American, Spirit Airlines and Southwest Airlines have the most exposure — or above 40% of what they flew in 2019 — to the states where the coronavirus is spreading, according to Becker.
But travelers may not stay home with this surge in coronavirus infections. As The Air Current noted in a report this week, Americans may be feeling fatigue from the constant coronavirus threat and may be willing to accept the possibility of exposure for some modicum of normality. That could mean that, barring a second government-mandated lock down, some might continue to fly even as case numbers mount.
Related: Which US airlines are blocking middle seats and requiring masks?
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There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
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- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
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- Annual Fee is $325.
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Rewards Rate
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
| 2X | Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com. |
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Intro Offer
You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.As High As 100,000 points. Find Out Your Offer.Annual Fee
$325Recommended Credit
Credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.Excellent to Good
Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.