Delta Air Lines said Tuesday that it will be able to avoid furloughs for flight attendants and ground workers in the U.S. because of buyouts, early retirements and other cost-cutting measures taken over the past several months.
But the airline will extend a 25% cut in hours and total pay for ground workers and many employees at its headquarters through the end of the year. And the Atlanta-based company could still furlough pilots.
The airline has been struggling through a 70% reduction in passenger counts and is burning through $750 million in cash a month.
“Delta will be able to avoid involuntary furloughs for our flight attendants and ground-based frontline employees in the U.S.,” including airport workers, reservations agents, mechanics and flight attendants, Delta CEO Ed Bastian wrote in a memo to employees. But doing that, he said, “requires that we continue to aggressively manage our costs."
Officers’ salaries are also being cut by 50% through December, and Bastian said he will not take a salary through the end of this year.
Even with that, the airline may still have to furlough pilots. Bastian said the airline still has too many pilots and is continuing negotiations with its pilots union on cost cuts that could reduce or eliminate furloughs.
Delta had previously said 2,500 pilots might be furloughed October 1 and then lowered that number to 1,941 because of early retirements that helped reduce pilot counts. Pilots are the only major unionized employee group at Delta.
The Air Line Pilots Association at Delta issued a statement saying protecting pilot jobs is its priority, and that it has offered voluntary measures to save the company millions of dollars.
Airline workers have been bracing for cuts. Airlines agreed to restrictions on furloughs when they accepted federal funding to help them through the pandemic. But those restrictions end Sept. 30. United Airlines said it plans to furlough more than 16,000 employees. American Airlines expects to furlough or lay off 19,000 workers in October.
Airlines and unions have been watching to see whether the CARES Act is extended, which could also extend restrictions on furloughs.
“While I’m hopeful that an agreement on an extension can be reached, the deal on a broader stimulus plan — in which the extension would be included — looks uncertain,” Bastian said. “We will continue to work with members of Congress and the Administration on a solution.”
Bastian said Delta is able to avoid furloughs for most workers because of employees' sacrifices and efforts to come up with unconventional ways to share work, cut costs and repurpose staff.
Some flight attendants have shifted to catering work or are flying reduced schedules.
Delta is also bringing some contracted work in house, such as wheelchair handling, and is considering bringing more work in house, including aircraft servicing, cargo handling and fueling.
Airlines' cuts to contract work has led to thousands of layoffs at Hartsfield-Jackson International Airport and around the country.
Delta started the year with about 90,000 employees but has cut its payroll by about 19,000 through early retirements and buyouts. It has also asked employees to take voluntary unpaid leave, with more than 40,000 taking leave ranging from a month to a year.
Bastian said, “It’s important to remember that we are still in a grim economic situation."
“Even when a vaccine is developed and distributed, it will take time for business travel to come back, because of the damage that’s been done to the global economy," he wrote. “It’s clear the recovery will still be long and choppy."
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