Delta Air Lines is preparing to send notices to more than 2,500 pilots about possible furloughs. Alongside this, the airline has reached an agreement with its pilots’ union about early retirement options as the carrier seeks to reduce its size amid decreased travel demand and major losses.
Preparing for furloughs
CNBC reports that Delta is gearing up to send notices to 2,558 pilots about potential furloughs. At the same time, Delta has also reached an agreement with its pilots’ union about early retirement options. The early retirement option is a voluntary course of action that, alongside unpaid leaves, will help Delta reduce its staff amid a need for reductions.
Delta confirmed the notices to Simple Flying and discussed early retirements:
“Delta and ALPA continue to discuss meaningful options to reduce or prevent pilot furloughs. In an effort to best prepare our pilots should furloughs be needed, Delta will send required notices to approximately 2,500 pilots to let them know of a possible furlough. Delta and the Air Line Pilots Association have reached an agreement on a pilot-specific early retirement program. As we work to manage through the impact of the pandemic and align staffing with expected flying demand, this voluntary early-out plan, together with other similar programs for all Delta employees, is a meaningful next step.”
Delta was hoping to minimize furloughs
Early this month, Delta was working with its unions to avoid furloughs for over 2,300 pilots. While the number has grown slightly since then, the airline is still trying the best it can to avoid furloughs. The airline’s policy has always been to focus on reducing the involuntary part of job cuts or furloughs. This has led airlines to give some incredibly attractive early retirement packages.
Why furloughs?
In a webcast viewed by Simple Flying, American’s chief, Doug Parker, noted that furloughs are part of the “old airline playbook.” For pilots, especially, furloughs are attractive for airlines. Letting go of pilots is difficult since they require a lot of training and are a big investment for carriers. The airline does not have to let go of pilots formally, but, in essence, can retain enough pilots for when it does recover some passenger demand. In the meantime, it keeps an airline’s payroll slim and is part of a cost-cutting move.
Right now, Delta’s pilots are protected from furloughs and layoffs until October 1st– when federal payroll support runs out. After that, two things are working against pilots. Not only is there no government support, but winter is approaching.
Aside from the busy holiday season, winter is one of the worst for airlines with low travel demand. This is especially true now that plenty of leisure destinations are no longer attractive– especially out in Europe and the northern United States. Already, Delta has indicated it will be much smaller come the fall. The MD-series has already been retired and the airline is planning for the last 777 flights in the fall. This alone reduces Delta’s fleet count by over 60 planes compared to pre-crisis levels.
Even among the planes that Delta will fly in the future, until summer 2021, the airline won’t need all of that capacity. Some will undoubtedly remain parked and, with new aircraft deliveries deferred and four A350 acquisitions canceled, some of Delta’s pilots may not have the option to fly other planes or else retrain for a few months.
Ultimately, there is still time for the situation to play out differently. While demand has started to return, it is nowhere near the levels airlines will need to turn profits. Plus, the airline may have to cut more flights as the crisis continues to unfold. Until we are past the current crisis, it will be a tough road for executives and employees as carriers cut daily cash burns and try to chart a successful path forward.