These are labor negotiations for pandemic times. Fresh off a dismal earnings report this week, Delta reportedly proposed slashing pilots' pay in exchange for letting them stay on the job. The decision due Sunday from the pilots will have big implications for other carriers.
Delta Air Lines told pilots on Friday it would avoid furloughs if they agreed to reduced guaranteed minimum pay, according to a memo seen by Reuters.
Delta is still struggling due to a dramatic decline in travel demand caused by the coronavirus pandemic. This week it reported second quarter revenue fell 91% and a $3.9 billion adjusted pre-tax loss.
The airline is working to further cut costs and more than 17,000 employees are taking voluntary departure packages, including more than 1,700 of 7,900 pilot ahead of a Sunday deadline for pilots to accept voluntary packages.
Delta flight operations senior vice president John Laughter said in a memo the company is “committed to preventing involuntary furloughs for as many, if not all, Delta people.”
Laughter said the company proposed reducing guaranteed minimum pilot pay by 15% for 12 months in exchange for a guarantee of no furloughs for one year.
“Our approach is to spread the work of a smaller airline among all our pilots to preserve all jobs – that would be unheard of in our history,” Laughter wrote.
Laughter said Delta pilots are currently being paid for more hours than they are actually flying. In June pilots flew about 10 actual hours and it will be 15.5 in July.
A spokesman for the Air Line Pilots Association said the union met with Delta on Thursday and suggested the airline was choosing “to negotiate in public directly with our pilots,” which it said that could impede the process.
Laughter noted “forward bookings have stalled as infection rates in parts of the U.S. spike and anxiety over the virus rises. Demand is still down about 80%, and we don’t expect to see measurable improvement until the U.S. infection rates fall again.”
The memo was reported earlier by CNBC. (Reporting by David Shepardson Editing by Sonya Hepinstall)
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Photo credit: Delta pilots will stay off furloughs if they agree to lesser pay. Skift