Spirit Airlines SAVE will cancel all flights to and from New York, Connecticut and New Jersey in response to the Centers for Disease Control and Prevention’s (CDC) warning against non-essential travel to and from the regions as the COVID-19 pandemic spreads. The flight suspensions will be effective soon and continue until at least May 4.The Miramar, FL-based low-cost airline will cancel its services to the airports of New York LaGuardia, Newark, Hartford, Niagara Falls and Plattsburgh.
Since late February, the Zacks Rank #2 (Buy) company has been witnessing significant decline in yields due to tumbling air-travel demand as a result of the coronavirus crisis. It is also seeing substantial pressure on fares and an adverse impact on load factor (percentage of seats filled by passengers). With uncertainty looming over the extent of duration of the viral outbreak and its subsequent effect on air-travel demand, the airline suspended its first-quarter and 2020 guidance. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
With plummeting air-travel demand, shares of Spirit have plunged more than 68% since the beginning of February. The industry has depreciated 49.6% in the period.
Apart from Spirit, JetBlue Airways Corp. JBLU will be reducing daily flights in and out of its four New York City-area airports following the CDC travel advisory issued for three states. The carrier will slash its capacity by 80% in April. With this schedule cut, the airline’s overall capacity will be lowered to 300 daily departures in the month from its normal average of 1,000, thus implying an approximate 70% cut. Flights to and from New York City-area airports will fall to 60 from its daily average of 205. Beyond April, flights might be curtailed further to 40 per day.
Amid travel restrictions and dwindling demand, carriers like Delta Air Lines DAL and United Airlines UAL also slashed capacity dramatically.
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