(Bloomberg) -- Deutsche Lufthansa AG has slashed capacity by up to 50% in the most aggressive move yet by a major European airline to cope with the severe fall-off in travel triggered by the coronavirus.
The German airline group cited “drastic declines in bookings and numerous flight cancellations” in recent days, saying all of its traffic is now affected. The carrier’s board decided Friday to reduce capacity even more than it previously had planned, it said in a statement.
“This measure is intended to reduce the financial consequences of the slump in demand,” Lufthansa said. “It complements the planned savings measures in personnel, material costs and project budgets as well as other liquidity measures.”
Carriers across the globe are cutting back to cope with a virus that quickly spread from its starting point in China to Europe and the U.S. Airline stocks in those regions have taken a major hit and have had to scramble to further adjust schedules that they had already tweaked with the expectation that the virus would be contained in Asia.
Lufthansa a week ago said it would extend capacity cuts beyond long-haul flights to and from China, initially the only routes affected, to also cover short-haul flights across Europe after the coronavirus spread to Italy, the group’s second most-important foreign market. That had already resulted in idled capacity translating into about 150 aircraft on the ground.
The International Air Transport Association warned this week that carriers may lose $113 billion in sales this year, almost four times greater than its estimate of the epidemic’s impact from just two weeks earlier.
--With assistance from Siddharth Philip.
To contact the reporter on this story: Richard Weiss in Frankfurt at rweiss5@bloomberg.net
To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Daniel Schaefer
©2020 Bloomberg L.P.
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