COVID 19: US airline capacity plummets as demand vaporises

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The major global US airlines have slashed capacity by unprecedented levels as the country works to combat the spread of COVID-19 coronavirus through drastic measures, with large municipalities in the US encouraging bars, restaurants and cinemas to shut down. Schools across the country have already closed, with a growing level of uncertainty over when children will return to normal studies.

In conjunction with a major pull-down in supply, some large US airlines are also parking a large portion of their respective fleets. Delta's decision to ground 300 aircraft represents approximately 33% of its operating fleet. American is also temporarily parking a substantial number of widebody jets.

The grounding of these aircraft is necessary, but as capacity comes out of the system and revenue continues its free fall, it will take some time for the cost actions that airlines are taking to catch up with the precipitous decrease in demand.

Unfortunately, it could be some time before US and airlines worldwide see the bottom of the demand curve, and as those operators continue to adjust their expectations amid an increasingly fluid situation, management at Delta and United appear to be the most candid with their employees regarding the severity of the crisis.

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