Delta CEO reassures staff as it shrinks operations, cuts hours
Delta Air Lines CEO Ed Bastian reassured employees Wednesday that the carrier is in the midst what feels like a "war" to weather the sudden storm caused by the novel coronavirus pandemic.
The Atlanta-based carrier, which already warned last week that it will emerge from the crisis as a smaller airline, faces rapidly declining demand and a resulting cash crunch as passengers cancel existing bookings and shy away from new ones.
But Bastian told employees in a webinar viewed by TPG that the company will get through it.
"The coronavirus is a challenge that is clearly the biggest challenge this company has ever faced in our history," he said. "It feels like a war that is at hand."
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Delta is slashing capacity by 70% and as a result it is consolidating facilities at airports around the country. At its Atlanta (ATL) hub, the largest in the world, it is "minimizing use" of Concourses C, D and E — a move that will shrink it to roughly its 1980s footprint at the airport.
The Atlanta airport has even closed its southern runway, 10/28, to accommodate parked Delta jets.
Delta is also closing Terminal 3 in Los Angeles (LAX), Terminal 2 at New York John F. Kennedy (JFK), and parts of Terminal D at New York LaGuardia (LGA) amid facility adjustments across its network.
Related: Delta to emerge a much 'smaller' airline from coronavirus crisis
Airline employees are now being asked to reduce their hours – and pay -- to help cut expenses. Ground staff must reduce their workweeks to three or four days, a move that will reduce payroll by as much as a quarter over the next 90 days.
Bastian, in a memo to staff on Tuesday, called the cuts "a meaningful contribution to the crisis at hand, and I thank you for making these sacrifices to protect Delta."
"These are all temporary measures, but provide us significant savings during this difficult period," he added.
Aid is on the way. Legislators in Washington have reportedly hammered out a deal for $50 billion in direct aid to carriers, split evenly between grants to fund employee compensation, and loans to maintain operations.
Delta expects to receive between $5 billion and $10 billion from the package after it is passed, Bastian said Wednesday.
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