Delta Resumes Paris, Cancun Flights in Hint of Improving Demand

(Bloomberg) -- Delta Air Lines Inc. plans to restore 100 flights in June, providing a hint that travel demand may be poised to inch up after almost disappearing because of the coronavirus pandemic.

The additions -- including flights from New York to Paris, and from Atlanta to Cancun -- are based on “customer demand,” federal health guidelines and government travel restrictions, Delta said in a statement Monday. The company cautioned that the schedule remains subject to change “due to the evolving nature of Covid-19.”

Delta and its rivals slashed flying, parked planes and relied on billions in federal aid as the virus’s spread prompted a 95% drop in U.S. passengers. A full recovery is expected to take years -- and Delta’s capacity this quarter will be 85% below last year’s level, including a 90% reduction on international routes. But adding flights on a handful of marquee routes suggests the potential for the beginnings of a rebound.

“For Delta, markets to Europe and the Caribbean are strong performers at this time of year so putting the capacity back into the market is a solid indication of their growing optimism,” said John Grant, an analyst at OAG Aviation Worldwide, a data provider.

“But we should all expect airlines to be making adjustments both up and down in the coming months as they respond to demand, further pockets of Covid-19 that may appear and the potential regulatory barriers to travel,” he said.

Delta surged 13% to $21.65 at 3:14 p.m. as travel-related companies rallied after an experimental coronavirus vaccine showed signs of promise. A Standard & Poor’s index of major U.S. carriers posted a comparable gain as United Airlines Holdings Inc. jumped 20% to $23.82, poised for the biggest gain since March 24.

Shanghai, Tel Aviv

In addition to the Paris flights, Delta plans to resume dropped service next month from New York to Amsterdam, Paris and Tel Aviv. The carrier has been flying from Atlanta to Amsterdam, Frankfurt and Paris, and between Detroit and Amsterdam and London.

Delta also will restore daily flights to Shanghai from Detroit and Seattle, subject to government approval. The company already is flying to Seoul from Detroit and Seattle, and from Seattle to Tokyo.

The airline will restart a dozen routes to the Caribbean, including Aruba, Jamaica and the Bahamas; four between Atlanta and cities in Central America, and five to cities in Mexico including Cancun and Mexico City.

Delta said it was increasing domestic flights as well, particularly from its Atlanta hub to cities in Florida and the western U.S. and between its New York hub and Florida.

“Some adventurous folks will return to the airways, probably into the summer and then more into the fall,” George Ferguson, a Bloomberg Intelligence analyst, said last week. “We think maybe you get back to 30% or 40% of demand in third quarter, but you’re still well below last year.”

Schedules can always be reduced if demand doesn’t materialize, Ferguson cautioned in an email Monday. A few airlines are adding back select routes for the summer, he said, but “just because it’s on the schedule doesn’t mean they will fly it.”

Delta is also making fleet changes amid uncertainty about when passengers will return. The Atlanta-based airline is cutting the number of Boeing Co. 717 jets in service by at least half over the next year, in the latest step to cull older, costlier planes from its fleet.

The carrier will stop flying the 110-passenger plane in Minneapolis and the New York area, according to a memo sent to pilots May 15. New York service will move to Airbus SE A220s and A320s, while Minneapolis flights will be made on A320s and Boeing 737s.

Parking the 717 jets will leave Delta with 30 to 45 of the narrow-body planes in service. Those in Minneapolis will be grounded by the third quarter of 2020 and the rest by the second quarter of next year.

©2020 Bloomberg L.P.

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