Delta Airlines Hopes To Continue Avoiding Employee Furloughs: CEO

ATLANTA — Despite still facing what its chief operating officer characterizes as a grim economic situation, Delta Airlines announced Tuesday that it will be able to avoid involuntary furloughs for flight attendants and ground-based workers based in the United States for the foreseeable future.

In a memo to employees, CEO Ed Bastian wrote that a 25 percent reduction of hours among ground workers has helped the company to avoid forcing furloughs on its workers, but said it will be necessary in the months to come. However, with the airline still “burning” about $750 million in cash per month, additional steps will also be necessary to avoid furloughs in the future, Bastian said.

The executive announced that the hour reduction, which was first said to be temporary, will be extended through the remainder of the year. In addition, Bastian said that executives will take a 50 percent reduction in salary while he will continue to take no salary for the remainder of the year.

“It’s clear that recovery will be long and choppy,” Bastian wrote in the memo, adding that even when a coronavirus vaccine is developed and distributed, it will be a long while before business travel returns to normal levels.

Bastian said that although the company can continue to commit to not resorting to involuntary furloughs to cut costs, he wrote in the memo that 40,000 Delta employees have voluntarily signed up for short-term and long-term unpaid leaves of absence. In addition to burning through $750 million each month, Bastian said that Delta continues to operate at 30 percent of traveler volume from this time in 2019.

Bastian also noted that the airline is hoping for an extension for federal CARES Act dollars designed to protect the industry but that the extension, along with a broader stimulus plan appears uncertain at this time, he wrote.

“I know it's been a stressful summer for you, with worries about health and job security compounded by the global reckoning over racial inequity and injustice,” Bastian wrote in the memo. “I hope this news provides some reassurance and certainty for you and your loved ones in the months ahead.”