Delta CEO asks staff to take extra unpaid trip in 2021 because the business continues to wrestle
Delta Airline employees check in their bags at Ronald Reagan National Airport in Arlington, Virginia on July 22, 2020. During the COVID-19 pandemic, all employees and passengers on board a Delta aircraft must wear face masks.
Michael A. McCoy | Getty Images
Delta Air Lines CEO on Wednesday asked employees to sign up for unpaid vacation with a slump in travel to continue through 2021.
“Our voluntary unpaid vacation program will continue to be critical to positioning Delta for recovery and we will need participants for the foreseeable future,” said Ed Bastian in a statement to employees. “I ask everyone to consider whether a voluntary vacation makes sense for you and your family.”
Delta executives and other airlines have warned of a slowdown in bookings in the past few weeks as Covid-19 infections have risen, making it harder to reduce cash burn.
The Transportation Security Administration said it screened 501,513 people at US airports on Tuesday, the fewest since July 4 and about a quarter of the 1.9 million people the TSA screened a year ago.
During an interview with CNBC’s Squawk on the Street, Bastian said that while Christmas and New Year’s Eve are only a few weeks away, demand is likely to rise to just under a third of last year’s level. He said he expected air traffic to recover in the spring after Covid vaccinations rose.
More than 40,000 Delta employees have opted for unpaid leave at the urging of the company. Around 18,000 acquisitions and early retirement packages accepted, reducing Delta’s pre-pandemic headcount by about 20%.
Other airlines are aiming to cut costs further in 2021, with a recovery months away. JetBlue Airways announced Tuesday that it plans to pause employee increases, pay parental leave and extend executive pay cuts to next year, CNBC reported.
“We plan to have sales billions of dollars below normal and challenge the JetBlue teams to reduce costs and improve efficiency even further,” said Mike Elliott, JetBlue’s chief people officer, in a statement to the employees.