Please ensure Javascript is enabled for purposes of website accessibility

Delta Chops 40% of Flights As Coronavirus Impact Grows

By Lou Whiteman - Updated Mar 13, 2020 at 4:19PM

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 airline will also ground up to 300 planes due to collapsing demand for flights.

Delta Air Lines (DAL -1.44%) said Friday it intends to cut capacity by 40% and ground up to 300 planes as the airline tries to deal with plunging demand due to the COVID-19 coronavirus.

CEO Ed Bastian, in a memo to employees first reported by CNBC, said that he would forgo his salary for the next six months as the airline tries to fly through turbulence caused by the global outbreak. Bastian said that near-term bookings have all but dried up, and said the airline intends to suspend flying to continental Europe over the next 30 days.

Delta is also offering voluntary unpaid leave to employees and is implementing a hiring freeze.

Delta employees at a ribbon cutting introducing a new jet.

Image source: Delta Air LInes.

The novel coronavirus is expected to cost global airlines more than $100 billion in revenue, and airlines are responding by cutting costs as quickly as they can. United Airlines Holdings on March 4 said it would cut international flying by 20%, and JetBlue Airways has also confirmed capacity cuts to deal with the downturn.

Delta had been expected to cut more flights, but the size of the cut is much higher than the 15% of capacity figure Bastian mentioned at an investor conference earlier in the week. The airline also said it was in discussions with regulators and lawmakers about possible support for the industry, echoing comments made by Treasury Secretary Steven Mnuchin earlier in the day.

The airline industry is certain to face losses from the outbreak extending well into the second quarter of 2020 if not beyond, but the U.S. industry in general and Delta in particular is well-positioned to weather the storm.

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

Delta Air Lines, Inc. Stock Quote
Delta Air Lines, Inc.
DAL
$29.39 (-1.44%) $0.43
JetBlue Airways Corporation Stock Quote
JetBlue Airways Corporation
JBLU
$8.34 (-2.66%) $0.23
United Airlines Holdings, Inc. Stock Quote
United Airlines Holdings, Inc.
UAL
$36.27 (-1.89%) $0.70

*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 07/06/2022.

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.