Allegiant, JetBlue and Spirit Airlines latest US carriers to cut flights and CEO pay
Allegiant Air, JetBlue Airways and Spirit Airlines are slashing schedules even further amid plummeting demand related to spread of the novel coronavirus pandemic in the U.S.
New York-based JetBlue will reduce capacity by at least 40% in both April and May, and expects "substantial cuts" through at least July, CEO Robin Hayes and president Joanna Geraghty told employees on Wednesday.
South Florida-based Spirit will reduce its schedule by 20% in April and by 25% in May, CEO Ted Christie told employees in a letter on Tuesday.
Allegiant, headquartered in Las Vegas, plans to cut capacity by up to 35% in April and May, up from current reductions of 15%, the airline said Wednesday. It has also suspended construction of its Sunseeker Resort project in Florida.
Get Coronavirus travel updates. Stay on top of industry impacts, flight cancellations, and more.
Executives at all three airlines cited rapidly falling demand, which Christie described as falling to "unprecedented lows," for each carriers' capacity cuts.
The cuts by the carriers are just the latest to hit an industry roiled by a precipitous drop in demand related to the pandemic.
Alaska Airlines, American Airlines, Delta Air Lines, Southwest Airlines and United Airlines have also slashed schedules amid the spread of COVID-19. United regional affiliate Trans States Airlines will cease flying on April 1 due to the crisis, eight months earlier than planned due to the coronavirus-related drop in demand.
Related: Trans States Airlines to shut down April 1, first US carrier to close amid coronavirus crisis
Both JetBlue and Spirit had already announced capacity cuts due to the COVID-19 crisis. JetBlue planned a 5% reduction in the "near term," and Spirit an at least 5% cut in April. Both carriers said they would cut further if the crisis worsened.
And worsened it has. Several U.S. carriers have cited passenger loads as low as 20% to 30% in March. Comparatively, average load factors across domestic airlines was 85.5% in March 2019, according to U.S. Bureau of Transportation Statistics data.
Industry organization Airlines for America (A4A) has asked the U.S. government for at least $50 billion in aid to get the industry through the crisis.
Related: US airlines seek at least $50 billion in aid to combat coronavirus crisis
Along with the capacity cuts, executives at Allegiant, JetBlue and Spirit are either taking salary cuts for the duration of the pandemic. Allegiant CEO Maurice Gallagher and president John Redmond are forgoing their salaries, while officers have halved their salaries.
At JetBlue, Hayes and Geraghty have halved their salaries and all staff at the vice president level and above are taking cuts. And at Spirit, Christie has reduced his salary by 30% and other executives are also taking pay cuts.
The reductions in pay are, in part, coupled with the effort by airlines to conserve cash. It is critical for all companies, including airlines, to have cash to pay their bills even as revenues dry up during the crisis. This coronavirus-related cash crunch is occurring at airlines around the world.
JetBlue, in addition to its other actions, is grounding some of its 259 Airbus and Embraer jets, Hayes and Geraghty said. The airline has also postponed the planned addition of four leased Airbus A321s, and is in talks with Airbus to postpone new A220 and A321neo deliveries.
Related: US airlines could retire older aircraft, focus on newer models due to coronavirus downturn
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.