In a sign of how the coronavirus pandemic is hammering air travel, airlines are asking the Transportation Department to let them suspend flights that are barely drawing any passengers.
JetBlue Airways (JBLU) - Get Report has requested permission to stop flights at 16 airports, including Atlanta, Chicago and Dallas, saying continued flights to those spots would “significantly harm” the company’s liquidity, Bloomberg reported.
Delta Air Lines (DAL) - Get Report, which has carried just one passenger per day to and from the airport in Worcester, Mass. for most of April, has requested Transportation Department permission to stop flights there and at eight other airports, according to Bloomberg.
As part of the government’s $50 billion bailout package to airlines, they must keep offering minimum flight amounts to locations they were servicing as of March 1, unless they receive approval from the Transportation Department.
Analysts have turned quite pessimistic on airlines.
Last month, S&P Global Ratings analysts lowered Delta’s credit rating two notches to a junk grade of BB from its lowest investment grade of BBB-. Delta's revenue should decline sharply as the pandemic cripples the airline industry, S&P said.
Earlier this month, Stifel downgraded JetBlue to hold from buy and slashed its share-price target to $11 from $26. The buy rating had stemmed from JetBlue's earlier ability to generate industry-leading earnings growth and from its potential a takeout target.
JetBlue shares recently traded at $9.95, up 10.37%, and have plunged 51% over the past three months. Delta shares traded at $26.88, up 10.41%, and have dropped 53% over the last three months.