Airlines-Outlooks
U.S. airlines are cutting back on once-lucrative overseas flights as a global recession prompts a sudden, steep decline in international travel.
Delta Air Lines Inc., the world’s largest airline, said Tuesday that it would reduce its international flying by 10%, starting in September. The Atlanta-based carrier said it was also mulling over additional job cuts even though 2,100 employees had accepted buyouts and would be departing Delta in the next few months.
Hardest hit will be flights to Europe and Asia, Delta Chief Executive Richard Anderson and President Edward Bastian told Delta’s 70,000 employees in a memo.
Delta plans to reduce its transatlantic capacity 11% to 13% and its transpacific flights 12% to 14% by exiting markets where it isn’t making money, flying smaller planes on some routes, flying less frequently to some cities and even eliminating year-round service.
United Airlines, meanwhile, expects to reduce its international capacity 15% during the first quarter, Chief Financial Officer Kathryn Mikells said at a conference of analysts and investors Tuesday in New York.
United, the Chicago carrier that dominates flying from the U.S. to China, has been hurt by a 25% drop in the number of people flying across the Pacific as well as a plunge in business travelers, the carrier’s core customer base.
Airlines around the globe are struggling to attract passengers amid an unprecedented plunge in demand for travel, analysts said. Traffic has plummeted in nearly every region of the world aside from the Middle East, according to the International Air Transport Assn.
Passengers who can afford to travel amid the current economic chaos are finding an abundance of cheap fares and plenty of room to stretch out on lengthy flights.
Chicago attorney Stan Orszula has flown to Europe four times in recent weeks and has found economy cabins to have been half empty, with even fewer takers in the premium economy, business- and first-class cabins on his flights.
“Right now, there are so many deals if you are flexible,” he said.
That’s because carriers are already locked into summer schedules, crafted before traffic fell, and are turning to deep discounts to fill their seats, analysts said.
Airfares to popular tourist destinations such as London and Paris during peak summer weeks are 30% to 40% cheaper than a year ago, according to BestFares.com.
Airlines are also slashing prices for travel within the U.S. Southwest Airlines Co. on Tuesday unveiled $39 one-way fares on a host of routes for tickets purchased before March 16. American Airlines and AirTran Airways are also offering bargains.
Among the deals available: $69 one-way from Philadelphia to San Diego, $70 one-way from New York to Orange County, and $52 one-way from Chicago to Raleigh, N.C., according to BestFares.com.
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