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Delta gives pilots ultimatum: Take a pay cut or be furloughed

July 19, 2020
3 min read
Delta 767
Delta gives pilots ultimatum: Take a pay cut or be furloughed
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It’s clear that the coronavirus pandemic has wreaked havoc on the travel industry. The airline industry hasn’t been spared, either. Airlines have suspended flights, severely disrupting travel to, from and within many of the world’s busiest markets.

To cut costs, Delta Air Lines is giving its pilots an ultimatum: take a pay cut or risk furlough. According to a leaked memo obtained by CNBC, the airline is proposing that the pilots union agree to a 15% cut to pilots’ minimum pay in order to avoid furloughs for a year. According to the report, the Air Line Pilots Association (ALPA) wants the airline to offer paid leaves of absences first.

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The news comes just days after a dismal week for the airline and other U.S. carriers.

Delta announced last week that it would retire its 10 Boeing 737-700s, as well as some of its 62 Airbus A320s and 56 Boeing 767-300ERs in a long-term cost savings effort. This is on top of the Boeing 777s and McDonnell Douglas MD-88s and MD-90s that it has already retired, as TPG’s Edward Russell first reported.

The airline saw operating revenues plummet by more than $11 billion, or 88%, year-over-year to $1.5 billion during the quarter ending in June. However, expenses only fell 40% to $6.3 billion and the airline reported a $5.7 billion net loss during the period.

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BOSTON, MA - APRIL 24: A Delta jet taxis to the gate at Boston Logan International Airport in Boston on April 24, 2020. (Photo by John Tlumacki/The Boston Globe via Getty Images)

Staff also face the impending likelihood of furloughs or layoffs in October. CEO Ed Bastian told the Financial Times last week that 15,000 staff would take voluntary exit packages by July 13.

John Laughter, Delta’s senior vice president of flight operations, said in a memo to pilots that voluntary buyouts and paid leaves weren’t enough.

“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,” according to the memo.

Delta already sent notices of possible involuntary furloughs – known as Worker Adjustment and Retraining Notification (WARN) Act notices – to more than 2,500 pilots. Similar notices could be sent to other members of its workforce. Federal rules only require at least 60 days' notice.

United Airlines already warned 36,000 staff of possible furloughs, and American Airlines told staff that they could have as many as 8,000 more flight attendants more than they need by the end of the year.

Featured image by (Photo by Zach Griff/The Points Guy)

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Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
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  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
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  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023
Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day
  • Intro Offer
    Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

    75,000 bonus miles
  • Annual Fee

    $395
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    740-850
    Excellent

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,300+ lounges, including Capital One Lounges and the Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023