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Delta works towards eleventh-hour deal to avoid pilot furloughs even as outlook remains 'grim'

Sept. 15, 2020
3 min read
Delta works towards eleventh-hour deal to avoid pilot furloughs even as outlook remains 'grim'
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Delta Air Lines CEO Ed Bastian had good news and bad news for staff on Tuesday. The good news: the carrier will not have to furlough any flight attendants or ground staff due to the coronavirus pandemic on Oct. 1.

The bad news: pilot furloughs loom if the Atlanta-based carrier cannot reach a deal with the Air Line Pilots Association (ALPA) to further reduce staffing. With just over two weeks until employment protections under the federal coronavirus aid package, or CARES Act, expire, the outcome is a nail-biter at Delta.

“While we are all grateful for our ability to mitigate furloughs, it’s important to remember that we are still in a grim economic situation," said Bastian. "It’s clear the recovery will be long and choppy.”

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Delta is hurting. Passenger volumes remain down roughly 70% compared to 2019 and the carrier is losing around $750 million a month, said Bastian.

U.S. airlines are battening down the hatches, so to speak, ahead of what will likely be a tough winter. Business travel, the mainstay of winter flying, remains almost non-existent and many airlines are cutting schedules back from their summer peaks instead of adding flights back.

In a plea for additional government aid earlier in September, trade group Airlines for America (A4A) president and CEO Nicholas Calio said airlines are "fighting for survival." He noted that the organization does not expect a recovery to 2019 levels for at least four years.

Related: US airlines ‘fighting for survival’ with no hope of V-shaped recovery

An extension of CARES Act payroll support and its employment protections appears unlikely after a Republican-led package died in the Senate on Sept. 10. Bastian said a deal "looks uncertain" in his note Tuesday.

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While Delta supports the extension of payroll support, the airline does not intend to take additional funds from the first CARES Act. The airline plans to turn down a government loan from the package with Bastian citing its recent success of mortgaging the SkyMiles loyalty program as an example of how it can raise funds without public support.

The carrier had just over 15 months of cash-on-hand as of Sept. 13, according the latest analysis by Raymond James. This is enough to cover expenses through next fall.

Related: Delta to mortgage SkyMiles program for up to $6.5 billion to help weather coronavirus hit

Delta continues to manage its cash carefully as it aims to reach beak-even by early 2021. Bastian said he will forgo his salary through the end of the year and 25% reductions in the number of hours certain ground staff work will also be extended.

More than 40,000 Delta staff agreed to unpaid leave with another more than 18,000 employees taking early departure packages. These voluntary reductions, and other unique measures, allowed Delta to avoid many of the furloughs facing staff at other airlines.

Related: Should Congress dole out more money for airline employees? The case for and against

Featured image by Getty Images

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Apply for American Express® Gold Card
at American Express's secure site
Terms & restrictions apply. See rates & fees
Best for the well-traveled foodie
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

4XEarn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S.
4XEarn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
3XEarn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • Intro Offer
    Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.

    60,000 bonus points
  • Annual Fee

    $250
  • 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.

    670-850
    Excellent/Good

Why We Chose It

There's a lot to love about the Amex Gold card. It's been a fan favorite during the pandemic because of its fantastic rewards rate on restaurants (that includes takeout and delivery in the U.S.!) and U.S. supermarkets. If you're hitting the skies soon, you'll also earn bonus points on travel. Paired with up to $120 in Uber Cash (for U.S. Uber rides or Uber Eats orders) and up to $120 in annual dining statement credits at eligible partners, there's no reason that the foodie shouldn't add this card to their wallet. Enrollment required.

Pros

  • 4x on dining at restaurants and U.S. supermarkets (on the first $25,000 in purchases per calendar year; then 1x)
  • 3x on flights booked directly with the airline or with Amex Travel
  • Welcome bonus of 60,000 points after spending $4,000 in the first six months

Cons

  • Weak on travel outside of flights and everyday spending bonus categories
  • Not as useful for those living outside the U.S.
  • Some may have trouble using Uber/food credits
  • Few travel perks and protections
  • Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.
  • Earn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S., and earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
  • Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • $120 Uber Cash on Gold: Add your Gold Card to your Uber account and each month automatically get $10 in Uber Cash for Uber Eats orders or Uber rides in the U.S., totaling up to $120 per year.
  • $120 Dining Credit: Satisfy your cravings and earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, Milk Bar and select Shake Shack locations. Enrollment required.
  • Choose the color that suits your style. Gold or Rose Gold.
  • No Foreign Transaction Fees.
  • Annual Fee is $250.
  • Terms Apply.
  • See Rates & Fees