Airlines slashed more domestic and international flights and executives took pay cuts as the coronavirus outbreak inflicts a growing toll on the travel industry.
United Airlines, the first major U.S. carrier to reduce domestic and international flights because of a reduction in travel, said Tuesday it expects to make more cuts in the coming months due to the “material” decline in demand and an increase in canceled trips.
Chicago-based United said last week it would slash its international schedule by 20% and its domestic schedule by 10% in April. On Tuesday, United said it expects to make reductions of at least 20% in May.
The airline “plans to proactively evaluate and cancel flights on a rolling 90-day basis until it sees signs of a recovery in demand,” United said in a filing with the U.S. Securities and Exchange Commission.
Many of United’s cuts involve flights to destinations where travel advisories have been issued or those performing “significantly below the system average,” United said. The airline is also offering less frequent flights in cities where it flies the same route multiple times a day or has options for passengers to connect.
American Airlines and Delta Airlines also announced broader cuts to flying on Tuesday.
American plans to cut international flying during the peak summer season by 10% and reduce domestic flying by 7.5% in April. Delta Air Lines is reducing capacity on international routes by as much as 25% and on domestic routes by as much as 15%.
Airlines also said they’re instituting cost-saving measures.
United CEO Oscar Munoz and president Scott Kirby will forgo their base salaries through at least June 30. United also said it was postponing “non-critical” projects requiring capital expenditures, got a $2 billion loan from a group of banks and expects to incur a first-quarter loss.
Southwest Airlines CEO Gary Kelly said he would take a 10% pay cut in a message to employees Monday and Delta said it is instituting a hiring freeze, taking some planes out of service and retiring older aircraft.
Airlines have extended policies waiving change fees meant to reassure travelers about booking trips amid uncertainty about where the outbreak may spread or the risk that airlines would cancel more flights.
United, American and Delta are all letting travelers make a change to domestic or international tickets purchased before April 30 at no fee.
Business travel, in particular, has faced a hit from the spread of COVID-19. Trade shows and conventions have canceled events, including four that would have drawn almost 100,000 visitors to Chicago, and a growing number of companies are instituting broad restrictions on employee travel.
The Global Business Travel Association reported 13% of member companies said they canceled or suspended all or most domestic trips in a survey conducted last week, up from 2% in a similar late February survey. Far more reported calling off all or most international trips — 41% compared with 7% in the earlier survey.
