Skift Take
Coronavirus is a disaster for U.S. airlines. Some executives compare its impact to the fallout after 9/11. The big question is how long will it last? Airlines hope the revenue dip will be short-term.
With lucrative business travel drying up because of concerns about Coronavirus, U.S. airlines are taking aggressive action to cut flights, park airplanes and slash costs, with many executives saying Tuesday at an investor conference that they must reduce capacity to avert what could be the worst U.S. airline economic disaster since 9/11.
None, however, is moving as fast as United Airlines, where President (and future CEO) Scott Kirby is planning for what he calls a worst-case scenario. To stem short-term problems, United over the weekend finalized cuts for 10 percent of its April domestic capacity and 20 percent of its international capacity, but now expects to slash more flights this spring, Kirby told investors. In May it will cut at least 20 percent of total capacity, and in future months it plans cuts "at least as large or larger, until we see concrete signs of returning demand," he said.
"We have been taking early and aggressive action, because we have seen the impact of demand when the virus spreads," Kirby said.
Kirby, who becomes CEO in May, joined executives from other airlines at the JP Morgan Industrials Conference, an annual event. All the executives expressed concern about the current climate, but many tried to strike an optimistic tone, saying they can weather a short-term crisis. Some executives tried to play up positives, noting many leisure travelers are biting at discounted fares, even as corporate travelers stay home.
However, Kirby outlined a more dire scenario than most competitors. In the past four days, he said, gross bookings for tr
