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

Jul 19, 2020

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

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.

Sign up for the free daily TPG newsletter for more airline news!

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. 

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)
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 photo by Zach Griff/The Points Guy

Chase Sapphire Preferred® Card

WELCOME OFFER: 100,000 Points


CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

Apply Now
More Things to Know
  • Our best offer ever! Earn 100,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,250 when you redeem through Chase Ultimate Rewards®.
  • Earn 2X points on dining including eligible delivery services, takeout and dining out and travel. Plus, earn 1 point per dollar spent on all other purchases.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 100,000 points are worth $1,250 toward travel.
  • With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 12/31/21.
  • Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
  • Get up to $60 back on an eligible Peloton Digital or All-Access Membership through 12/31/2021, and get full access to their workout library through the Peloton app, including cardio, running, strength, yoga, and more. Take classes using a phone, tablet, or TV. No fitness equipment is required.
Regular APR
15.99%-22.99% Variable
Annual Fee
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.