Delta says it is in White House talks to receive government support

WASHINGTON/CHICAGO (Reuters) – Delta Air Lines (DAL.N) chief executive Ed Bastian told employees on Friday the airline will cut 40% of capacity in the coming months and is in talks with the U.S. government about potential assistance.

U.S. Treasury Secretary Steven Mnuchin speaks to reporters about coronavirus and its effect on the economy at the White House in Washington, U.S., March 13, 2020. REUTERS/Kevin Lamarque

“We are in discussions with the White House and Congress regarding the support they can provide to help us through this period,” Bastian said in a memo seen by Reuters. “I’m optimistic we will receive their support. That said, the form and value is unpredictable, and we can’t put our company’s future at risk waiting on aid from our government.”

Bastian said it would cut its overall capacity by 40% in the next few months – “the largest capacity reduction in Delta’s history, including 2001.” Bastian said Delta would also park up to 300 aircraft.

Airlines are reeling from a plunge in bookings and traffic, as the fast-spreading coronavirus pandemic prompts travel restrictions and event cancellations around the world.

Earlier, U.S. Treasury Secretary Steven Mnuchin urged Americans to shake off worries about the coronavirus and continue to fly on domestic airline routes.

Mnuchin told reporters the administration of President Donald Trump was ready to provide needed liquidity to U.S. airlines.

“It is of strategic importance to us,” Mnuchin told reporters at the White House, adding that he was in close touch with the CEOs of U.S. airlines. The Trump administration viewed the ability of airlines to continue to fly as a top priority, he said.

“I think the airlines want to make sure that they can continue to provide domestic travel. They also want to make sure that they keep as many workers employed as they can,” he said.

“If I weren’t so busy working I would be going home to Los Angeles and I would be perfectly comfortable getting on a commercial plane this weekend. Despite the fact that we told people to shut down travel a little bit, people can travel in the domestic U.S.,” he said.

The International Air Transport Association on Friday warned that air carriers could collapse if the coronavirus crisis lasted another two or three months.

IATA CEO Alexandre de Juniac told Reuters revenue losses internationally would be “probably above” the $113 billion figure the group had forecast a week ago, before the Trump administration’s announcement of U.S. travel curbs on much of continental Europe.

Reporting by David Shepardson, Alexandra Alper, David Lawder and Andrea Shalal and Tracy Rucinski, Editing by Heather Timmons, Diane Craft and Rosalba O’Brien

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source: reuters.com