ATLANTA – Delta Air Lines (DL) announced it would not furlough US Flight Attendants or front-line ground Crew in a memo to employees published early Tuesday. This comes directly after DL was able to raise US$6.5bn secured by its SkyMiles rewards program.
“As difficult as this crisis has been for all of us, it has revealed the strength of Delta’s character and the power of our values-led culture,” said Bastian. He continues to cite creativity and innovation as the driving force behind the announcement.
The COVID-19 pandemic hit the airline industry especially hard, forcing mass layoffs as carriers rush to secure a financial future.
Creative Job-Saving Efforts
Delta’s ability to provide job security for this many employees represents an overwhelming positive during very tough times. The airline cited a number of innovative efforts that made this announcement possible:
- A Rotating month-on, month-off program for Flight Attendants, as well as inclusion in catering services.
- Cross-training the reservations and customer care team, and spreading large volumes of work across both departments.
- Insourcing airport operations roles, such as cargo handling, aircraft fueling, aircraft servicing, and more.
In addition, CEO Ed Bastian will be eliminating his salary through the end of the year, and reducing officer salaries by half during the same period of time.
Not Without The Sacrifice of Others
While positive, the ability of DL to secure jobs is not without the sacrifice of others. Nearly 40,000 of the companies employees chose to take an unpaid leave of absence, with an additional 17,000 opting for the early retirement package.
The future of the airline’s Pilots is also uncertain with the CARES act expiring October 1. DL, the US’s second-largest airline, has clearly stated an overage of Pilots still exists. Negotiations between DL and the Air Lines Pilot Union (ALPA) are still ongoing, despite other major US-based airlines already reaching agreements.
The Financing Which Made This Possible
Following in the footsteps of other major US-based airlines, DL turned to its SkyMiles loyalty program to raise additional funding. The popular rewards program will secure an additional US$6.5bn in loans, with the airline burning US$750m in cash per month.
With some experts expecting a return to pre-COVID-19 levels of travel demand as early as Q4 2021, DL officials are hoping this additional cashflow can get the company through to that time. “A healthy balance sheet and cash position will position us to emerge with the strength to grow quickly once the recovery begins,” said Bastian.
Featured Image: DL Airbus A321. Photo: Shon Fridman/Airways (instagram @sierrafoxtrot.aviation)