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Delta Plans to Delay Decision to Furlough Pilots by a Month

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Per a CNBC report, Delta Air Lines (DAL - Free Report) will delay its decision to furlough pilots until Nov 1 as the company negotiates cost-cutting measures with the pilots’ union and gets clarity on whether airlines will get additional federal aid to protect jobs through March 2021.

In a statement, the pilots’ union Air Line Pilots Association, stated, “This move will provide time as we continue to lobby for a clean extension of the CARES Act and the Payroll Support Program and resume our negotiations with Delta.”
 
Previously, Delta had planned to furlough 1,941 pilots in October, i.e, post expiration of the federal aid on Sep 30. This number was reduced to 1,721 when a tentative agreement was reached between Delta and the pilots’ union. 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.

With the expiration of the federal aid approaching, U.S. airlines have been seeking additional financial assistance to keep workers employed for another six months. On Monday, two key Republican senators introduced a bill that would provide passenger airlines with more than $25 billion in aid to protect jobs for six months from now. However, congressional aides said that it will most likely not win passage since similar aid requests have been made by several other struggling industries.

As part of a last-ditch effort to persuade Congress for more federal help, CEOs of American Airlines (AAL - Free Report) , United Airlines (UAL - Free Report) and JetBlue Airways (JBLU - Free Report) , along with the union leaders, held a news conference on Capitol Hill on Tuesday. It remains to be seen whether U.S. airlines get a second bailout.

Each of the stocks mentioned above carries a Zacks Rank #4 (Sell), except for United Airlines, which carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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