Please ensure Javascript is enabled for purposes of website accessibility

Lufthansa to Cut Up to Half Its Flights as Travel Demand Plummets

By Lou Whiteman - Updated Mar 6, 2020 at 11:40AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The coronavirus crisis deepens for global airlines.

Deutsche Lufthansa (DLAK.Y -2.43%) intends to cut its capacity by up to 50% in the coming weeks, one of the most dramatic signs yet of the impact the COVID-19 coronavirus is having on travel demand.

The German airline in a statement said it "has been exposed to drastic declines in bookings and numerous flight cancellations due to the spread of the COVID-19 virus," saying all regions are now affected. The cuts, which will impact up to half of its global schedule, are designed to "reduce the financial consequences of the slump in demand."

An traveler wearing a mask while sitting on a plane

Image source: Getty Images.

Airline stocks have been among the sectors most affected by the novel coronavirus, with some U.S. carriers now down more than 40% year to date. A number of U.S. carriers have suspended service to China and other areas hard-hit by the outbreak, and United Airlines Holdings on Wednesday said it would cut international flying by 20% and domestic flights by 10%. But none to date have taken any action as severe as what Lufthansa is doing.

Lufthansa had already cut flights to China and had been warning it could take more drastic actions if demand did not quickly recover.

The airline's moves are fresh evidence that the coronavirus will impact operations, and financial results, well past the current quarter, and could depress travel through at least the peak summer season.

On Thursday the International Air Transport Association estimated the coronavirus could cost airlines about $113 billion in lost 2020 revenue worldwide, well above the $29 billion estimate it had forecast just weeks ago.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Deutsche Lufthansa AG Stock Quote
Deutsche Lufthansa AG
DLAK.Y
$5.63 (-2.43%) $0.14

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
323%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/07/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.