Delta will avoid involuntary furloughs for most frontline workers when federal aid expires, but pilot layoffs remain likely
- Delta Air Lines will avoid involuntary furloughs for flight attendants and frontline ground workers on October 1, when CARES Act provisions expire, the airline said Tuesday.
- However, the airline still plans to furlough pilots. As of late August, the plan was to furlough nearly 2,000 of them.
- The airline industry has been among the most severely impacted by the COVID-19 pandemic.
- Visit Business Insider's homepage for more stories.
Delta Air Lines said Tuesday that it expects to avoid involuntary furloughs for flight attendants and frontline ground workers when Cares Act provisions expire on October 1, even as the coronavirus continues to keep travel demand near record lows.
But one key group of workers are an exception: Delta's pilots.
In a memo to employees, CEO Ed Bastian said the furloughs for flight attendants and frontline ground workers could be avoided because a large number of Delta employees have taken voluntary buyouts or unpaid leaves. Weekly work hours have also been reduced for some groups.
Bastian said 20% of Delta's pre-pandemic workforce took early exits, reducing the airline's payroll by about 17,000. Another 40,000 employees had taken a short- or long-term unpaid leave of absence.
"Avoiding involuntary furloughs in this unprecedented environment is entirely due to the innovation, hard work and shared sacrifice of our people," Bastian wrote.
However, the airline still plans to furlough pilots, Bastian said. As of late August, the plans were to furlough 1,941 of them on October 1.
Pilots are the only unionized workers at Delta. The airline has previously said that it has offered different buyout and leave deals to pilots due to the terms of their collective-bargaining agreement.
The airline and the Air Line Pilots Association, the union representing Delta's pilots, are still in talks seeking an 11th-hour deal, Bastian said.
The association said in a statement to Business Insider that it was continuing to negotiate with the airline.
"Pilots are career-long stakeholders in Delta Air Lines, and as such, we are motivated to help the Company while still upholding our core value of protecting pilot jobs," a spokesperson said in a statement. "We are in ongoing talks with management to mitigate pilot furloughs with the goal of finding win/win solutions."
In late August, Delta had about 11,200 pilots but expected to need just 9,450 by summer 2021, senior vice president of flight operations John Laughter wrote in a memo to pilots that was seen by Business Insider.
"We are simply overstaffed, and we are faced with an incredibly difficult decision," Laughter wrote in that August memo. A total of 1,806 pilots took early retirement packages, the airline told Business Insider.
Airlines have been hit particularly hard by COVID-19, with travel demand collapsing early in the pandemic and making only modest recoveries since, hampered by summer spikes across the US. The industry does not expect to recover to 2019 levels of demand until 2024. Bastian wrote that Delta is seeing just 30% of last year's demand levels.
Delta received more than $5.4 billion in payroll support through the CARES Act. The airline agreed not to furlough or cut pay for workers until October 1 in exchange for the aid.
The airline has raised about $16.5 billion in liquidity during the pandemic, but continues to burn about $27 million in cash each day. Delta said on Monday that it would raise an additional $6.5 billion — 240 days of cash at current rates — by mortgaging its SkyMiles frequent-flyer program.
Delta and other airlines have also voiced support for an extension of the CARES Act. However, such a deal has so far failed to materialize.
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