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Delta Suspends Services to 10 US Airports on Demand Slump

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Delta Air Lines Inc (DAL - Free Report) is temporarily suspending service to 10 U.S. airports due to a dramatic drop in air travel demand amid coronavirus concerns.

Effective May 13, the airline is suspending operations at Chicago Midway, Oakland International Airport, Hollywood Burbank, Long Beach, T. F. Green International Airport, Westchester County Airport, Stewart International, Akron-Canton, Manchester-Boston Regional Airport and Newport News/Williamsburg International Airport through at least September.

Passengers affected by the flight suspensions will be given the flexibility to reschedule canceled flights to any date through Sep 30, 2022. Additionally, Delta employees affected by the disruption will receive some sort of pay protection through Sep 30, 2020.

Apart from these flight suspensions, the Zacks Rank #3 (Hold) company is seeking permission from the U.S. Department of Transportation to temporarily stall operations in nine other U.S. cities, where travel demand dropped to the point where a very limited number of people flew daily for most part of April. In those nine cities, the airline plans to consolidate services by serving only the important airports. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Due to the coronavirus-induced travel demand woes, shares of Delta have plunged more than 62% since the beginning of February compared with the industry’s 56.4% decline.

Price Performance Since February


The impact of coronavirus is well reflected in the carrier’s first-quarter 2020 earnings report. This Atlanta-GA based behemoth incurred a loss (excluding 33 cents from non-recurring items) of 51 cents in the March quarter, narrower than the Zacks Consensus Estimate of a loss of 72 cents. Delta had reported earnings of 96 cents per share (on an adjusted basis) in the year-ago quarter, driven by high passenger revenues as air-travel demand was buoyant at that time. Delta’s peers like American Airlines (AAL - Free Report) , United Airlines (UAL - Free Report) and Southwest Airlines (LUV - Free Report) also incurred losses in the first quarter due to the travel slump.

While Southwest Airlines and United Airlines carry a Zacks Rank #3, American Airlines carries a Zacks Rank #4 (Sell).

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