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Delta Responds to Shrinking Demand with Significant International Capacity Cuts

We were just mentioning the extraordinary drop in demand for international travel as evidenced by Delta’s February metrics.  Unlike past years, they’re taking little time in making changes:  The carrier will cut international capacity next winter by 10% over 2008, with 11-13% cuts Trans-Atlantic and 12-14% cuts across the Pacific.  They haven’t announced specifics, but there’ll be a combination of departures from certain markets, moving some routes to seasonal (summer only), and shrinking planes on others.

Back in October, November, December when things were first getting bad, the airlines didn’t seem to see the full extent of the disaster coming.  They’re seeing it now.  This is going to be an awful, awful year for demand.

The WSJ has an article today giving an overview of the industry, and it’s not pretty:  United’s February international traffic shrunk 22% over last year.  Airlines are projected to see a 15% revenue decline in 2009.  And so on.  The question is whether they can shrink quickly enough to stay profitable.

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