Atlanta: Delta Air Lines Inc. will drop service to 11 midsize US cities next month amid weak demand because of the Covid-19 pandemic, a reminder of the industry’s fragility after a record stock rally.
The service suspensions affecting cities from Aspen, Colorado, to Bangor, Maine, will help lower costs, Delta said in a statement Friday. The affected airports are among 75 authorized this week for service cuts by the U.S. Department of Transportation. They all will retain at least some flights from other carriers, the agency said.
“Delta continues to face an unprecedented impact to our business, and suspending operations at these airports will reduce costs where customer demand is low,” said Sandy Gordon, senior vice president of domestic airport operations.
Delta’s cuts provide a counterpoint to investor exuberance this week after American Airlines Group Inc. boosted its flight schedule for next month and United Airlines Holdings Inc. followed suit hours later, signaling gains in demand. American’s announcement spurred major stock gains, but even with the additional flights, total July capacity at both carriers will still fall by more than half from last year’s levels.
United to shut bases
Underscoring the outlook for a slow recovery, United said it would close three out of its four international bases for cabin crews. The company will shut the bases in Hong Kong, Tokyo and Frankfurt effective October 1, with only the London base staying open, as the company braces for an even slower rebound in international flying than domestic service.
The decision will affect about 840 flight attendants, some of whom would have the opportunity to transfer to bases located in the U.S., depending on their eligibility to work in the country, the company said.
“International is slower growing because there are still quarantine rules in place that limits the ability of people to travel to Europe and to Asia,” Cowen analyst Helane Becker said, adding that closing the bases is a “way to save money and keep costs low while still being in a position to grow as demand returns.”
A Standard & Poor’s index of the five biggest U.S. carriers surged 35% this week, a record. American paced the gains with a 77% jump, followed by United’s 51% advance. Delta climbed 36%.
Delta will suspend flights July 8 in Erie and Scranton/Wilkes-Barre in Pennsylvania; Flint, Michigan; Fort Smith, Arkansas; Lincoln, Nebraska; New Bern/Morehead/Beaufort, North Carolina; Peoria, Illinois; Santa Barbara, California; and Williston, North Dakota, in addition to Aspen and Bangor.