According to a Reuters report, Delta Air Lines Inc (DAL - Free Report) will be able to avoid involuntary furloughs for its frontline employees, except for pilots, on Oct 1, thanks to a large number of employees opting for voluntary-separation programs.
In a memo to employees, the airline’s CEO Ed Bastian stated that the company will continue to reduce work hours and executive pays through the end of this year. Additionally, Bastian will forego his salary this year.
Airlines are grappling with coronavirus-induced weak air-travel demand. With the virus concerns continuing unabated and a recovery in travel demand seeming to be a distant possibility, airlines are planning to shrink operations post Sep 30, 2020, and this implies reducing work force. Notably, U.S. airlines, including Delta, which have accepted financial assistance under the CARES Act to cover their payroll expenses, are prohibited from laying off employees until Sep 30.
In August, Delta revealed that it plans to furlough 1,941 pilots in October as part of its cost-cutting measures to combat the coronavirus-induced low travel demand. To limit furloughs, the airline has offered several voluntary-separation options such as early-retirement programs. Other U.S. carriers namely United Airlines (UAL - Free Report) , American Airlines (AAL - Free Report) and Hawaiian Airlines, the wholly owned subsidiary of Hawaiian Holdings (HA - Free Report) , have also warned of job cuts.
To keep workers employed through March 2021, airlines are seeking additional financial assistance to cover payroll costs. In this regard, Bastian stated that although Delta has "effectively managed" its staff between now and the start of peak-summer 2021 travel, it still favors an extension of the government aid to protect airline jobs.
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