Airlines last week globally cut 21 million seats, or 23 per cent of capacity, even before the steep reductions planned by large US carriers begin this week, according to OAG analysis.
The biggest share of last week's cuts was in Europe, with five airlines in the region slashing capacity by more than 60 per cent week over week, including Ryanair (down 83.9 per cent), SAS Scandinavian Airlines (down 82.6 per cent), Iberia (down 75.4 per cent), Turkey's Pegasus Airlines (down 73.2 per cent) and Lufthansa (down 68.9 per cent), according to OAG analyst John Grant.
By country, the largest cuts in terms of number of available seats last week were in Peru, Portugal, Spain, Finland and Denmark. Some countries that had not yet seen significant capacity cuts, including Brazil, India and Indonesia, began seeing them last week, he said.
Over the past ten weeks, airlines globally have cut 35 per cent of capacity, representing about 37 million total seats, according to OAG.
The data next week could be "as bad as this week if not worse," Grant said, as US carriers are still working through their own recently announced cuts. Over the past ten weeks, the four largest scheduled airlines in the world were the US Big Three and Southwest Airlines - which, with last week's capacity down only 0.1 per cent week over week, has outpaced United Airlines in capacity.
In a research note, Cowen analyst Helane Becker said US carriers soon will have to make drastic job cuts, projecting that Delta Air Lines will furlough about 60,000 people and United about 40,000 people, using the estimate of 98 employees per aircraft.
"The situation remains fluid, but pragmatically, the airlines can't hold off making tough decisions any longer," according to Becker. "Management is trying not to take such drastic measures, but without government help, it doesn't make sense to churn through cash - Delta noted its cash burn is US$50 million per day - to keep people on board that won't be needed for at least one to two years after the recovery starts."
Bank of America now projects US carriers will see revenues for 2020 drop 36 per cent year over year.
As China recovers from the outbreak, its domestic capacity is rebounding, with 217,000 domestic seats added back last week, Grant said. Once the US begins to see recovery, Becker said it would take 12 to 18 months for the industry to get back to its previous growth rate.
"Leisure travelers likely won't have the money to take vacations, and corporate travel will be slow to return," she said.