Delta to emerge a much ‘smaller’ airline from coronavirus crisis

Mar 20, 2020

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

Delta Air Lines will emerge as a “smaller” carrier from the coronavirus crisis warns chief financial officer Paul Jacobson as the airline prepares to wind down the majority of its schedule by April.

“We’re going to be smaller coming out of this,” he told employees during an internal webinar Thursday viewed by TPG. “Certainly quite a bit smaller than when we went into it, and we’ll have the opportunity to grow.”

Delta has slashed schedules by 70% in April and May, and is in the process of parking more than 600 of the 1,340 active aircraft it had at the end of December. The reductions are part of an effort to drastically cut costs as revenue plummets amid fears of COVID-19.

Get Coronavirus travel updates. Stay on top of industry impacts, flight cancellations, and more.

Nearly every U.S. carrier has seen demand fall off a cliff as the pandemic spreads. Delta’s reductions are the steepest of U.S. carriers to date, though nearly every other airline has moved to pare schedules and many in the industry expect even more cuts.

In 2019, nearly 811 million travelers boarded domestic flights in the U.S., according to U.S. Bureau of Transportation Statistics data via Cirium. Delta carried 175 million of those passengers, or nearly 22% of the total, second only to American Airlines.

Jacobson’s comments Thursday are among the first by a major U.S. airline executive of their expectations on the industry post-crisis. In addition to emerging as a smaller carrier, he said Delta will come out of it with a “more modern, more nimble” fleet.

Related: Delta to ground half its fleet as it winds down majority of its operation

A Delta MD-88 lands in Atlanta. (Image by Alberto Riva/TPG)
A Delta MD-88 lands in Atlanta. (Image by Alberto Riva/TPG)


Delta already plans to retire its McDonnell Douglas MD-88 and MD-90 jets, as well as some Boeing 767s, this year due to the crisis. However, more fleet changes may come depending on the length and depth of the downturn.

“I would not be surprised to see not only Delta return as a smaller airline, but also American, United and even Southwest use this as an opportunity to cull some aircraft from their fleet,” Atmosphere Research president and founder Henry Harteveldt told TPG. “The question every airline will wrestle with is ‘what is the right number.'”

The coronavirus crisis has prompted American Airlines to accelerate the retirement of its Boeing 757s and 767s. The Fort Worth, Texas-based carrier may also move up plans to pull down its Embraer E190 fleet, as well as the Airbus A330-300s it has repeatedly postponed removing.

All U.S. carriers are, or are expected to, restructure their orderbooks and slow new aircraft deliveries until demand for air travel recovers.

Related: US airlines seek at least $50 billion in aid to combat coronavirus crisis

Airline workforces are also being pared. As of Wednesday, Delta CEO Ed Bastian said that 10,000 of the carrier’s 91,000 active employees had already taken a voluntary unpaid leave package. And on Thursday, American president Robert Isom said the carrier had added an early retirement option for staff with more than 15 years at the airline in addition to voluntary unpaid leave offer.

A smaller Delta will also mean changes to the airline’s route map. Jacobson did not comment on this directly in the webinar, though he did say the current expectation is that the recovery in demand will be “slow at first.”

“It’s a contraction to the core of the network is what it’s going to be,” Brad DiFiore, who advises airports on developing new routes as a managing director at Ailevon Pacific, said about what a smaller Delta could look like. “Secondary hubs will be more a function of the local economies, [and] I suspect that focus cities are going to get hit pretty hard.”

Delta maintains core hubs in Atlanta (ATL), Detroit (DTW), Minneapolis/St. Paul (MSP) and Salt Lake City, plus secondary — or “coastal” — hubs in Boston (BOS), Los Angeles (LAX), New York John F. Kennedy (JFK) and LaGuardia (LGA), and Seattle (SEA). It has focus cities in smaller markets, including Austin (AUS), Cincinnati (CVG), Nashville (BNA) and Raleigh/Durham (RDU).

Related: Delta and JetBlue Want to Make Boston the Next Dual-Hub City

On the international front, DiFiore expects a “significantly smaller… footprint.” Routes between Delta hubs and those of its partners abroad will likely remain but those to secondary cities — both in the U.S. and abroad — could be cut.

“A lot depends on where the coronavirus peaks and when it recovers,” he said.

For now, at least, Delta and other airlines are in survival mode, winding down schedules and cutting costs to save cash to bridge them through the duration of the crisis. Already, two U.S. regional carriers — Compass Airlines and Trans States Airlines — have said they will close their doors permanently as a result of major airlines’ reductions.

“Our 100% priority and focus is right now is making sure we get through the dark parts and see the light of day at the end,” Jacobson told employees in the webinar.

Related: American Airlines in ‘fight of our lives’ as it plans more coronavirus cuts

Featured image by Darren Murph / The Points Guy.

Chase Sapphire Preferred® Card

WELCOME OFFER: 80,000 Points


CARD HIGHLIGHTS: 3X points on dining and 2x points on travel, points transferrable to over a dozen travel partners

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

Apply Now
More Things to Know
  • Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 when you redeem through Chase Ultimate Rewards®.
  • Enjoy benefits such as a $50 annual Ultimate Rewards Hotel Credit, 5x on travel purchased through Chase Ultimate Rewards®, 3x on dining and 2x on all other travel purchases, plus more.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,000 toward travel.
  • With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories
  • Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
Regular APR
16.24% - 23.24% Variable
Annual Fee
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.