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U.S., international airlines cut capacity

TORONTO — To align capacity with expected demand, Delta says it is reducing system-wide capacity by 15 points, with international capacity reduced by 20-25%, and domestic capacity reduced by 10-15%. The airline says it will “continue to make adjustments to planned capacity as demand trends change.”

Delta’s cuts are close to those announced by United Airlines. CEO Ed Bastian said the airline is “prepared to do more” if the outbreak grows.

American Airlines announced it will cut international flying by 10% this summer and reduce U.S. flying by 7.5% in April. It has delayed training of new pilots and flight attendants.

United said it has arranged $2 billion in additional bank borrowing to preserve financial flexibility – raising liquidity from $6 billion to $8 billion.

The airlines are also evaluating their assets – planes, engines, spare parts and other items – to determine what could be used as collateral for more borrowing, if that is needed.

There were reports this week that the White House overruled a plan by the Centers for Disease Control and Prevention (CDC) to recommend that older and physically weak Americans be advised not to fly on commercial airlines because of the new virus.

American’s CEO, Doug Parker, said the largest decline has been in tickets within seven days of departure, which are often bought by business travellers.

“That is absolutely driven by U.S. corporations putting in place travel advisories and travel restrictions and cancelling travel,” he said. “Once we get to the point where corporate America is ready to travel again, that will come back.”

In other parts of the world, Qantas has cut international capacity by almost 25% over the next six months. Air France says it will cancel some 3,600 flights this month. Lufthansa has said it’s looking at cutting capacity by up to 50%. Just about every carrier worldwide is having to make tough decisions and cutting capacity as they ride out the coronavirus impact.

With file from The Associated Press