Lufthansa Plans to Slash Flights on Virus’s Hit to Travel
(Bloomberg) -- Deutsche Lufthansa AG will significantly curtail flights and ground more planes in a new sign of the coronavirus’s escalating toll on travel.
The German flag carrier will cut as much as a quarter of its short- and medium-haul flights across all brands in the coming weeks. The number of grounded aircraft for long-haul services will rise to 23 from the current 13, the company said in a statement late Friday. Lufthansa may also reduce working hours.
The pullback underscores the pain airlines are feeling from the outbreak, which began in China and has spread to 52 countries and territories. Companies are putting lucrative corporate travel on hold, while industry groups cancel major events and leisure travelers reconsider vacation bookings.
The airline industry is expecting the first annual decline in global passenger demand in 11 years, with lost revenue of about $30 billion, according to the International Air Transport Association.
The coronavirus prompted 347,414 flights to be canceled or removed from airline schedules from Jan. 24 to Feb. 27, according to Cirium, a travel-analytics company. The total includes 290,519 flights within China.
United Airlines Holdings Inc., the biggest U.S. carrier on trans-Pacific routes, is paring more service to Asia as travel demand sinks.
The U.S. airline is canceling flights from Los Angeles and Houston to Tokyo’s Narita airport from March 8 to April 24. Service from Chicago to Narita will be scrapped March 8 to March 27, the company said in an email Friday. United is also reducing the frequency of flights on other routes between the U.S. and Asia.
Lufthansa, which holds its annual press conference on March 19, said it can’t yet estimate the earnings impact of the outbreak.
The company, which includes the Brussels Airlines, Swiss, Austrian and Germanwings brands, is joining other European carriers in warning of the impact on flying from the virus.
Air France-KLM Chief Executive Officer Ben Smith said on Friday his company is preparing new cost-cutting measures to protect the carrier from what he called an “extraordinary situation” stemming from the epidemic. British Airways parent IAG SA said it couldn’t provide an earnings forecast this year, because weakened demand in Asia has now rippled across to Europe.
Lufthansa said the exact scale of capacity reductions will depend on further developments in the spread of the virus.
©2020 Bloomberg L.P.