Airlines cut flights further despite relief: Update

Adds detail from United, bailout package.

US air carriers continued to cut capacity and warned of a slow recovery despite billions of dollars in assistance approved today by federal lawmakers.

American Airlines will further slash domestic seat capacity and drop international travel almost entirely in April and May, the company said today. Southwest Airlines yesterday warned of demand "at levels we have never seen" in a message from chief executive Gary Kelly. United Airlines expected April flights to have occupancy rates "into the teens or single digits" even after cutting its capacity by 60pc for April.

"The global economy has taken a big hit, and we do not expect travel demand to snap back for some time," incoming chief executive Oscar Munoz said in a letter to employees today. "We are currently planning to make even deeper cuts in May and June."

Global air travel has plummeted as governments try to mitigate the coronavirus pandemic. The transportation safety administration reported screening just 203,498 passengers at US airports yesterday, down by 15pc from the previous day and just 8pc of the number of passengers screened on the same day in 2019. US refiners have shifted jet fuel production into diesel to limit output as demand for the fuel plunged this month.

US lawmakers today approved $58bn in grants and loans for air carriers, including $50bn for passenger carriers and $8bn for cargo carriers, as part of a $2 trillion stimulus bill. The funding would allow United to avoid any involuntary furloughs until 30 September, the company said.

American Airlines now plans to reduce domestic flight capacity by 60-70pc in April and by 70-80pc in May compared to the same months of 2019. Recent Federal Aviation Administration (FAA) changes that added flexibility to policies that require minimum numbers of flights to certain airports allowed for the domestic reduction, the airline said. International flight capacity will fall by 80-90pc over the same period for both April and May.

By Elliott Blackburn