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Delta (DAL) to Add Surcharge on Unvaccinated Staff's Healthcare

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Delta Air Lines (DAL - Free Report) will add a monthly surcharge of $200 on healthcare plans of unvaccinated employees. With coronavirus cases rising in the United States, thanks to the highly contagious Delta variant, the move is aimed at urging employees to get vaccinated so that operations can be protected.

The surcharge will take effect from Nov 1. In a memo to employees, Delta’s CEO Ed Bastian said that the additional charge will be necessary to address the financial risk the company might be exposed to in case employees don’t get vaccinated. Evidently, Delta incurred a cost of $50,000 per person on average hospital stay for COVID-19.

The company further requires unvaccinated employees to wear masks in all indoor Delta settings, effective immediately. As long as COVID-19 case rates are high, U.S. employees who are not fully vaccinated will be required to take a COVID test every week, beginning Sep 12. A positive test result will require the concerned employee to isolate and be out of workplace.

In compliance with state and local laws, effective Sep 30, Delta will be providing COVID pay protection only to fully vaccinated employees who are experiencing a breakthrough infection. As a matter of fact, 75% of Delta’s employees are vaccinated.

Zacks Rank & Key Picks

Delta carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the airline space are Controladora Vuela Compania de Aviacion, S.A.B. de C.V. (VLRS - Free Report) , SkyWest, Inc. (SKYW - Free Report) and Corporacion America Airports S.A. (CAAP - Free Report) . While Controladora Vuela and SkyWest sport a Zacks Rank #1 (Strong Buy), Corporacion America carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

While shares of Controladora Vuela and Corporacion America have rallied more than 100% each in a year’s time, SkyWest shares have gained more than 40%.