Delta to ground half its fleet as it winds down majority of its operation
Delta Air Lines will ground more than 600 aircraft in its latest round of cuts that will see the carrier flying less than third of its expected schedule as the coronavirus crisis worsens.
The SkyTeam Alliance carrier will cut system capacity by 70%, with international reduced by more than 80%, over the next several months. Delta CEO Ed Bastian detailed the moves in a Wednesday memo to employees that was titled "Protecting Delta's Future."
"Following the national emergency that was declared by the U.S. president, demand for travel has dropped significantly," said Bastian. "Revenue for the month of March is now expected to decline by almost $2 billion over last year, with our projection for April falling even more."
Get Coronavirus travel updates. Stay on top of industry impacts, flight cancellations, and more.
As part of the reductions, Delta will park more than 600 aircraft from its active fleet that stood at 1,340 jets — including those operated by regional affiliates — at the end of December. This will include the early retirement of its remaining McDonnell Douglas MD-88s and MD-90s, as well as some Boeing 767s.
Delta's cuts represent what is essentially a wind down of one of the largest airlines on the globe. The carrier will consolidate operations at its Atlanta base — currently the largest hub in the world — and at other airports. It also will shutter many of its premium lounges globally.
And, in a testament to how fast fears of COVID-19 are impacting airlines, Delta planned what was then an "unprecedented" 40% system capacity reduction just five days ago.
Related: Delta slashes capacity, parks up to 300 jets amid 'unprecedented' coronavirus impact
No U.S. carrier has pulled down capacity as much as the latest plan from Delta calls for. American Airlines has cut international capacity by 75% and domestic by up to 30%, though many expect it to make further reductions. And United Airlines has reduced system capacity by 60%.
TPG understands that, even with the latest cuts, demand for air travel continues to fall faster than the U.S. carriers' capacity reductions.
On Monday, Airlines for America (A4A), the industry organization representing U.S. carriers in Washington, asked the government for at least $50 billion in aid to get the industry through the crisis. President Donald Trump has, in comments since, indicated that the government will provide financial support to airlines.
Related: US airlines seek at least $50 billion in aid to combat coronavirus crisis
"[We] remain optimistic that our industry will receive support to help address this crisis," said Bastian Wednesday. "That said, we have to continue to take all necessary self-help measures. Cash preservation remains our top financial priority right now."
Delta has already taken a number of moves to preserve cash. The airline has stopped new aircraft deliveries and nearly all capital investments, Bastian has foregone his salary, and more than 10,000 of its roughly 91,000 employees have take voluntary unpaid leave.
The International Air Transport Association (IATA) has called on global governments to support airlines through the current cash crunch. The organization warns that more and three-quarters of airlines globally do not have enough cash to last three months.
Already, the coronavirus crisis has forced UK regional carrier Flybe to shut its doors, and United affiliate Trans States Airlines to accelerate its closure by eight months to April 1.
Related: Trans States Airlines to shut down April 1, first US carrier to close amid coronavirus crisis
TPG featured card
at American Express's secure site
Terms & restrictions apply. See rates & fees.
| 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. |
| 5X | New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App. |
| 3X | Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines. |
| 2X | Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Pros
- Valuable dining and food-related credits
- Flexible rewards with airline and hotel transfer partners
- Multiple travel and purchase protections
- No foreign transaction fees
- Access to Amex Offers for additional savings (enrollment required)
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 $8,000 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.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You’ll know upfront exactly how much you’ll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That’s up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin’ locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- New! As an American Express® Gold Card Member, you can enjoy complimentary Hertz Five Star® Status. Enjoy benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
- Book your travel through the Amex Travel App with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.