Detroit Metro braces for reduced traffic due as airlines trim flights due to coronavirus
The impact of the coronavirus is being felt at Detroit Metropolitan Airport, the nation's 19th busiest, and hammering the country's leading airlines.
Anxiety over the virus, blamed for 29 deaths in the United States, is taking a growing economic toll that is hitting travel companies, cruise operators and airlines, causing stock markets to gyrate wildly and prompting talk in Washington of payroll tax cuts and industry bailouts — potentially including the airline industry.
This also comes as Michigan had its first coronavirus cases announced late Tuesday night by Gov. Gretchen Whitmer. The cases are from Oakland County and Wayne County, where Detroit Metro is located.
Delta Air Lines Inc., which operates over 400 flights per day from Detroit Metro, said Tuesday it's cutting 25% of its international flight capacity and 15% of its domestic flight capacity because of reduced demand related to the virus. The airline had previously suspended all service between the U.S. and China until April 30.
Delta also has postponed until May 1 seasonal service between Detroit and Rome that was scheduled to begin on April 1. The airline also has reduced service between Detroit and Nagoya, Japan, to three times weekly from daily flights.
American Airlines Inc., which operates about 65 flights per day from Detroit Metro, also announced plans to reduce international flight capacity for the summer peak season by 10%, including a 55% cut in trans-Pacific flight capacity. American also said it is planning to reduce its domestic flight capacity by 7.5% come April.
“As the virus has spread, we have seen a decline in demand across all entities, and we are taking decisive action to also protect Delta’s financial position," CEO Ed Bastian said in a statement announcing the latest round of capacity cuts.
"As a result, we have made the difficult, but necessary decision to immediately reduce capacity and are implementing cost reductions and cash flow initiatives across the organization.”
Delta shares closed Tuesday at $45.46, up 4.46% since trading began. Shares in American closed at $17, up to 15.25%. Altogether, the Dow Jones Industrial Average roared back from its record plunge Monday, adding 1,167 points. And the S&P 500 gained 4.94%.
Detroit Metro passenger traffic is likely to feel a corresponding hit because of the capacity rollbacks. The airport, which typically averages about 3 million passengers per month, is bracing for a decrease of approximately 100,000 passengers for the months of February through April 2020 that will put a dent in its overall traffic numbers for the first quarter.
"Due to the coronavirus, some U.S. airlines have modified their flight schedules to and from Asia," said Lisa Gass, a spokeswoman for the Wayne County Airport Authority. "The estimated 100,000 decrease in passengers equates to approximately 1% fewer passengers than we would normally expect for this time period."
Passenger traffic at Detroit Metro reached a record 36.8 million last year, up 4.3% from 2018, officials said. The number of outbound passengers visiting or residing in the Metro Detroit area, known as origin and destination traffic, was also up and set an all-time record in 2019. Origin and destination traffic increased nearly 6% for the year.
Airlines typically operate about 1,100 flights per day from Detroit Metro, a key hub for Delta. Six-hundred-fifty flights were scheduled to depart between 1:30 p.m. and 10:45 p.m. on Monday.
Joyce Lemkin, a West Bloomfield Township resident, told The Detroit News that she is seeking a refund for first-class United Airlines tickets for a trip to Israel that was scheduled to take place from March 16-27. She had purchased non-refundable tickets for herself and her daughter, but she is postponing the trip because Israel is now requiring a 14-quarantine for all foreign visitors.
United offered to waive her change fee, she said, but the airline told her she would have to travel by Dec. 28 in order to use the resulting flight credits. She is seeking a refund because she won't be able to reschedule the trip by the deadline.
"We would be quarantined longer than the trip was supposed to last," she said. "This is crazy. This is a pandemic. I didn't cancel my flight. It was canceled basically by Israel. I think we should be able to get refunded. Can you imagine having $11,000 in credits and you don't know when you are going to be able to use them?"
In a statement, United said: "Given the high level of uncertainty regarding travel because of COVID-19, we are working hard to give customers more flexibility. We are now waiving change fees on all tickets issued on or before March 2 — domestic or international — for travel March 10 through April 30."
United says rebooked travel must take place within 12 months from the original ticket issue date, and passengers are able to use their flight credits on any United route from any city. Many companies, including Detroit's three automakers, have told employees to restrict all nonessential air travel.
Martha Whitt, a Delta spokeswoman, said the airline is also waiving change fees for both international and domestic flights through April 30 if the ticket was issued on or before March 9 and for customers buying flights between now and March 31. Delta customers whose travel plans include Shanghai and Beijing, China; Seoul, South Korea, and all locations in Italy are being allowed to make a one-time change to travel plans without a fee through May 31.
American has announced that change fees will be waived for customers who purchased tickets prior to March 1 for travel through April 30.
Delta's Bastian has sought to reassure passengers it is still safe to fly with the airline, saying in a blog post on the company's website the company is equipped to prevent the spread of the virus on its airplanes.
"As a global airline, we have strong relationships in place with health experts including the Centers for Disease Control (CDC), the World Health Organization (WHO), the Federal Aviation Administration (FAA) and local health authorities worldwide," he wrote. "We are in constant contact with them to make sure our policies and procedures meet or exceed their guidelines."
International airlines also are scrambling to contain the financial impact of the virus. Lufthansa, which operates flights from Detroit to the German cities of Frankfurt and Munich five times a week, has said it's considering suspending 50% of its total flight operations. The airline is also considering temporarily decommissioning its Airbus A380 fleet.
The airline said in a statement the flight cutbacks are "designed to reduce the financial consequences of the slump in demand," adding that "it is not yet possible to estimate the burden on earnings to be expected from current developments" surrounding the coronavirus.
President Trump has tried to reassure Americans it is still safe to take flights after meeting with airline CEOs at the White House: “In large portions of the world it is safe to fly,” he said after meeting with leaders of airlines including United Airlines, American Airlines, Southwest Airlines on March 4.
Trump has since sought to downplay the impact of the virus in an effort to limit the potential political fallout as he campaigns for re-election.
"So last year 37,000 Americans died from the common Flu. It averages between 27,000 and 70,000 per year. Nothing is shut down, life & the economy go on," he tweeted on Monday. "At this moment there are 546 confirmed cases of CoronaVirus, with 22 deaths. Think about that!"
Groups that lobby for airlines and the U.S. travel industry have sought to encourage U.S. residents to continue with their travel plans to areas that are not impacted by the virus.
"The safety and well-being of passengers and crew is the top priority of U.S. carriers. They will not fly anywhere deemed unsafe, and right now domestic routes remain open for business," Airlines for America, which lobbies for major carriers in Washington, said in a statement.
"There are no restrictions on domestic travel," the airline group continued. "U.S. airlines are working around the clock enhancing disinfection and cleaning protocols, especially in the areas of the cabins touched most frequently such as armrests and tray tables. Carriers also are collaborating with airports, the Transportation Security Administration (TSA) and U.S. Customs and Border Protection (CBP) to ensure appropriate cleaning in public spaces of the airport."