United Airlines to extend coronavirus-related capacity cuts into summer
U.S. airlines are taking actions unseen since the days following the 9/11 attacks as they attempt to minimize the impact from the dramatic drop in bookings amid traveler fears of the novel coronavirus outbreak.
United Airlines was the first to unveil sweeping cuts to its schedules when it said earlier this month that it would reduce international flying by 20% and domestic by 10% in April. JetBlue Airways promptly joined them, and Alaska Airlines, American Airlines, Delta Air Lines and Spirit Airlines unveiled their own reductions this week.
United's April cuts are only the beginning for the Chicago-based carrier. The airline is working on a roughly 20% systemwide capacity reduction in May, and further reductions of a similar magnitude monthly through the summer, United president — and future CEO — Scott Kirby told investors at the J.P. Morgan Industrials Conference on Tuesday.
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"This is a crisis that’s going to have a large near-term impact on revenue," he said. "While we expect the duration to be short, it’s going to be deep.”
Kirby did not comment on what flights or routes will be cut in May and through the summer. The airline axed 13 routes in addition to those already cut to Asia and Italy in April, and trimmed frequencies on more than 160 routes around its network.
American also sees COVID-19 fears depressing travel through the summer. Speaking at the same J.P. Morgan conference, the Oneworld carrier's network head Vasu Raja said American is planning its 7.5% domestic capacity reduction and 10% international reduction "all the way through the IATA summer, [until] Oct. 25.”
Related: Coronavirus-related U.S. airline flight suspensions and waivers
No other U.S. airline has yet to plan for systemwide capacity cuts through the summer. However, executives at all of the airlines that spoke at the J.P. Morgan event said they are watching demand closely and are prepared to make further cuts.
Alaska plans to cut capacity by roughly 3.2% in May, executives said Tuesday. Delta is planning a 15% system capacity cut before summer though executives did not provide a specific timeline. JetBlue's 5% capacity reduction applies to its March through mid-May schedule. And Spirit is reducing its April schedule by roughly 5%.
As of noon Tuesday, the Centers for Disease Control and Prevention (CDC) reported 647 confirmed COVID-19 cases and 25 deaths in the U.S. These numbers are up dramatically since the first case not directly connected to the initial outbreak in China was reported at the end of February.
Related: United Airlines suspends 13 routes amid coronavirus response
The severe drop in passenger bookings are driving airlines' capacity cuts. Executives at both Delta and United said Tuesday that domestic bookings are down by at least 25% over the past two weeks — a dramatic drop in an industry that saw strong demand in both January and February before the impact of COVID-19 was felt domestically.
United sees an even more dire environment. The airline is planning for demand to be down 70% year-over-year in both April and May, before slowly recovering to down roughly 20% by December, said Kirby. For comparison, demand fell by roughly 40% in the months immediately following 9/11.
“The demand scenario is not a forecast but what we’re planning for under a dire stress test scenario," he said. "It’s far better to be too aggressive than not aggressive enough.”
United, for its part, expects the recovery from the COVID-19 fears to take around 18 months — or until around September 2021 — said Kirby.
Related: US airline execs warn coronavirus impact ‘could be worse than 9/11’ downturn
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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.
- 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.
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- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.
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. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
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.