Editor’s note: The following is a transcript of the accompanying video. ©2020 Thomson Reuters
The havoc created by the coronavirus outbreak has made future visibility so cloudy for the airlines that they’re ditching their outlooks. American, Delta, and Spirit airlines suspended their financial forecasts for 2020 on Tuesday [10 March].
It’s one of the drastic measures airlines are taking to deal with the fallout from the fast-spreading epidemic as tourists cancel trips and companies clamp down on travel.
Southwest Airlines CEO Gary Kelly said he’s cutting his pay by 10%, responding to what he calls a “severe recession” for the airline industry. Over at United, CEO Oscar Munoz and President Scott Kirby are forgoing their base salaries through at least the end of June. United is also cutting its capital spending this year by a third.
Airlines are also slashing their schedules. Delta is cutting its domestic flights by up to 15% and international capacity by up to 25%. It’s also freezing hiring across the company and looking at retiring older planes.
American is cutting domestic flights by 7.5% in April and international by 10% for the summer season. It has not announced any major cost cut plans. But it noted that it stands to save about $3 billion in costs this year from the huge drop in fuel prices.
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