Delta slashes capacity, parks up to 300 jets amid ‘unprecedented’ coronavirus impact
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 is taking drastic steps in self-preservation as it faces what CEO Ed Bastian calls an “unprecedented” impact from the novel coronavirus outbreak.
The Atlanta-based carrier will cut system capacity by 40% over the “next few months,” suspend all flying to continental Europe for at least 30 days, and park up to 300 aircraft in an effort to mitigate the travel slowdown, Bastian told employees in a memo Friday. Delta will also cut capital investments by at least $2 billion and is offering staff voluntary unpaid leave.
“The speed of the demand fall-off is unlike anything we’ve seen – and we’ve seen a lot in our business,” he said. “We are moving quickly to preserve cash and protect our company. And with revenues dropping, we must be focused on taking costs out of our business.”
Delta’s moves are by far the most drastic taken yet by a U.S. carrier amid the rapidly growing crisis from the spread of the coronavirus disease COVID-19. Other airlines, including American Airlines and United Airlines, have cut capacity and parked some planes, but neither had taken as drastic steps as Delta by early Friday afternoon.
The magnitude of Delta’s capacity cut is equivalent to removing an airline about the size of Air Canada from the skies, based on 2019 numbers.
Bastian did not say what 300 jets Delta plans to park during the crisis. However, airline executives did say on Tuesday that they were parking both narrow-body and wide-body aircraft, and were considering retiring Delta’s fleet of McDonnell Douglas MD-88s and MD-90s early.
Delta had 898 aircraft, ranging from the Boeing 717 to the Airbus A350, in its mainline fleet at the end of December, its latest fleet plan shows. It contracted another 442 regional jets with affiliate carriers.
“The situation is fluid and likely to be getting worse,” Bastian said in the memo. “[But] Delta remains better-positioned to weather a storm of this magnitude than ever before in our history… We will get through this, and taking strong, decisive action now will ensure that we are properly positioned to recover our business when customers start to travel again.”
Featured image courtesy bradleypjohnson via Flickr.
Welcome to The Points Guy!
WELCOME OFFER: 60,000 Points
TPG'S BONUS VALUATION*: $1,200
CARD HIGHLIGHTS: 2X points on all travel and dining, 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.
- Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases.
- 2X points on dining at restaurants including eligible delivery services, takeout and dining out and travel & 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for travel through Chase Ultimate Rewards®. For example, 60,000 points are worth $750 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.
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Earn 2x total points on up to $1,000 in grocery store purchases per month from November 1, 2020 to April 30, 2021. Includes eligible pick-up and delivery services.