FILE PHOTO: Delta Air Lines passenger planes are seen parked due to flight reductions made to slow the spread of coronavirus disease (COVID-19), at Birmingham-Shuttlesworth International Airport in Birmingham, Alabama, U.S. March 25, 2020. REUTERS/Elijah Nouvelage
CHICAGO (Reuters) – Delta Air Lines (DAL.N) is cautious about adding more flights to its schedule due to spikes in coronavirus cases through the southeast and southwest of the United States, Chief Executive Ed Bastian said in an employee memo on Thursday.
United Airlines (UAL.O) flagged this week a hit on bookings from new outbreaks and quarantine restrictions and said it was sending notifications of potential furloughs to about 45% of its frontline employees.
U.S. airline shares .DJUSAR.lost 5% in morning trade, with Delta down 5.8%.
“The continued growth of the virus through the Sun Belt, coupled with quarantine restrictions being implemented in large markets in the northern part of the country, give us renewed caution about further schedule additions at this time,” Bastian said.
His comments raised questions as to whether Delta may pull back some of its summer flying. It has added 1,000 flights in July and another 1,000 this August, but had already said it was unlikely to add many more for the rest of the year.
Its July schedule is still only about 30% of what it would normally fly.
Atlanta-based Delta is among U.S. carriers that have boosted liquidity and cut costs to stem a daily cash burn, but they need revenue to recover and will need to shrink in size as they wait for demand to return.
Bastian again warned the recovery “is likely to be lengthy and slow” and encouraged employees to sign up for early exit packages by a July 13 deadline to minimize involuntary furloughs in the fall.
Delta is due to report second-quarter results on July 14.
Reporting by Tracy Rucinski; Editing by Bernadette Baum and Chris Reese