American Airlines and Delta slash flights and Southwest CEO will take 10% pay cut over coronavirus

Airlines across the US are continuing to feel the squeeze of the coronavirus outbreak, with firms slashing yet more flights and bosses taking pay cuts in efforts to keep the companies’ heads above water. 

American Airlines and Delta Airlines both announced plans to cut more flights Tuesday, while Southwest Airlines CEO told employees he will take a 10% pay cut as the firm grapples with sagging passenger demand for flights. 

American Airlines said it will cut domestic flights by 7.5% for April and international flights by 10% for the summer peak travel season, including temporarily suspending service to several European cities, including Rome, Milan, Barcelona, Venice, Paris and Madrid.

American Airlines announced Tuesday it will cut domestic flights by 7.5% for April and international flights by 10% for the summer peak travel season

Delta also announced it will reduce capacity by around 15% across its network, cutting domestic flights by as much as 15% and international flights by as much as 25%. Delta CEO Ed Bastain (pictured in 2018) said the firm was ‘taking every possible action to take care of and protect our customers during a stressful time’

The airline, which had previously canceled all flights to China where the coronavirus outbreak began, has now extended this until at least October. 

It will also suspend its full-year and quarterly financial forecasts.

Cuts to summer flight plans and beyond is an indication that the industry is now bracing for the outbreak to continue for several more months into the year.

Delta also announced Tuesday that it will reduce capacity by around 15% across its network, cutting domestic flights by as much as 15% and international flights by as much as 25%. 

The slashing of flights consists of: Pacific flights by 65%, Trans-Atlantic by 15-20%, domestic by 10-15% and Latin by 5%. 

Delta CEO Ed Bastain said in a statement: ‘In the weeks since COVID-19 emerged, Delta people have risen to the challenge, taking every possible action to take care of and protect our customers during a stressful time.

‘As the virus has spread, we have seen a decline in demand across all entities, and we are taking decisive action to also protect Delta’s financial position. As a result, we have made the difficult, but necessary decision to immediately reduce capacity and are implementing cost reductions and cash flow initiatives across the organization.’ 

The airline also announced a series of other changes to quell the impact of the global outbreak on the organisation. 

These include a company-wide hiring freeze and offering voluntary leave options to employees. 

Southwest’s CEO Gary Kelly (pictured in March) will take a 10% pay cut in light of the hammering the firm has taken to passenger bookings due to the outbreak – which he has likened to the fallout from the September 11 2001 terrorist attacks

Meanwhile, Southwest’s CEO Gary Kelly has sought to take matters into his own hands, saying he will take a 10% pay cut in light of the hammering the firm has taken to passenger bookings – which he likened to the fallout from the September 11 2001 terrorist attacks.

The exact pay cut is not known but, in 2018, Kelly’s salary was $750,000 and his total compensation was $7.73 million, according to The Wall Street Journal. 

The airline declined to confirm to DailyMail.com if the salary reduction would come to Kelly’s salary or to his total take home pay. 

‘I can confirm Gary stated he would reduce his salary, which has not increased since 2017, by 10 percent. We are not providing any additional details on his salary cut,’ the statement sent to DailyMail.com read.

The toll on the company is expected to be up to $300 million in the month of March alone, the company stated: ‘Gary reiterated that we are prepared and have a strong financial position, but cautioned that we are seeing an alarming drop in bookings and sales due to the Coronavirus, as we outlined in a form 8-K filing last week, with an estimated impact of $200-$300 million in the month of March alone.’ 

A woman wears a face mask while walking through JFK International Airport in New York on March 5

In the video message to employees on Monday, Kelly said coronavirus had created a challenge more serious than the industry has faced since 9/11, ‘and it may be worse.’

‘The velocity and the severity of the decline is breathtaking,’ he said.  

It’s not the first time the toll on the industry has been likened to 9/11. 

Industry group IATA warned in February that the reduction in global airline capacity, measured by how many seats remain grounded, had become greater than after the terrorist attacks.

After 9/11, airline revenue dropped an estimated $19.6 billion in 2002 dollars. 

The coronavirus crisis could cost the industry an estimated $29.3 billion in lost revenue for 2020, analysts said.

Tuesday’s announcements follow a series of moves made by airlines in recent weeks as the spread of coronavirus ramps up across the globe. 

United Airlines previously announced it was slashing domestic flights by 10% and international flights by 20% in April.

All flights to China and Hong Kong were axed, and South Korea was added to its travel waiver list.  

A woman wears a protective mask and surgical gloves at JFK Airport, New York, on March 9. Fears are mounting after 26 people have died from the virus in the US and 765 people are now infected

The global coronavirus outbreak has left airlines some of the hardest hit by the crisis as people fear traveling during the pandemic

JetBlue said it was cutting flights by about 5% in the near term. 

Meanwhile, across the pond, the European Commission is relaxing its airport-slot rules so that airlines no longer need to fly empty planes across Europe in order to retain their takeoff and landing rights for the next season.

Europe’s ‘use-it-or-lose-it’ rules mean that airlines must use a takeoff or landing slot at a level of at least 80% to keep their flying rights. 

As airlines want to avoid taking a hit to their flying rights along with passenger numbers, empty aircraft have until now become a fixture on runways.

The global coronavirus outbreak has left airlines some of the hardest hit by the crisis as people fear traveling during the pandemic. 

In yet another blow, CDC guidance issued Monday ordered the elderly and sick to stock up on medications and avoid large crowds, cruise ships and airplanes in order to protect themselves against the deadly disease. 

Such advice will do little to restore faith in flying among panicked passengers. 

Fears are mounting after 26 people have died from the virus in the US and 765 people are now infected.

The one saving grace to the industry could come in the form of the sharp drop in fuel prices, as the cost reduction from the oil price rout could be as much as $3 billion. 

Top airline executives, including United President Scott Kirby, American CEO Doug Parker, and Southwest’s Kelly, will be speaking at JPMorgan’s Aviation, Transportation and Industrials Conference Tuesday. 

The event itself will now be held via teleconference rather than its usual New York event due to the outbreak.   

Read more at DailyMail.co.uk