Delta CEO warns of 'furloughs in the tens of thousands' for airline industry if stimulus talks remain at stalemate
Bastian noted almost half of Delta's workforce has taken voluntary retirement or separation packages and leaves of absence to avoid furloughs.
Delta CEO Ed Bastian warned of furloughs in "the tens of thousands" for the airline industry if Congress is unable to end the stalemate on another round of coronavirus stimulus.
"If we do not get the support that we need, I know within the industry there will be furloughs and probably some pretty large numbers of furloughs in the tens of thousands of employees," Bastian told the Claman Countdown on Tuesday.
In this July 22, 2020 photo, a ticketing agent for Delta Airlines hands a boarding pass to a passenger as he checks in for a flight in the main terminal of Denver International Airport in Denver. Unions are gaining support in Congress for another $32 (AP)
Bastian noted that Delta has already had to mitigate potential furloughs with almost half of the airline's workforce taking voluntary retirement or separation packages and leaves of absence.
"If we can keep using good voluntary measures to get through this, we can mitigate furloughs but its probably hard to say for sure that we’ll be able to do that completely," Bastian added.
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Despite the stalled talks, Bastian is optimistic about the likelihood of another relief package for airlines based on the support the industry has received "all the way up through the president."
"There’s been a lot of support, all the way up through the president, to considering extending the relief for the airlines to get through the next six months in turn for agreeing to continue to keep those workers in place because we know airlines are going to be essential to the recovery of our economy," Bastian said. "Our country is too large, we’re connected through transportation systems given our scale in size in how we operate, particularly our businesses, and keeping the employees in place will allow us to keep businesses in place that will get them moving as soon as they’re ready."
Since the pandemic, many of Delta's competitors have warned their employees will be furloughed once the aid given through the CARES Act expires in October.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| DAL | DELTA AIR LINES INC. | 47.85 | -0.03 | -0.06% |
| AAL | AMERICAN AIRLINES GROUP INC. | 14.02 | +0.13 | +0.94% |
| UAL | UNITED AIRLINES HOLDINGS INC. | 51.42 | +2.68 | +5.50% |
| SAVE | SPIRIT AIRLINES INC. | 4.03 | -0.08 | -1.95% |
Last month, American Airlines sent furlough notices to 25,000 of its employees, United warned furloughs could impact 36,000 employees, and Spirit Airlines warned two weeks ago that 20% to 30% of their workers at risk of furloughs.
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Delta, however, is not holding out for a resolution from lawmakers and has continued to take action to encourage passengers that it's safe to fly, including an extension of its middle seat policy beyond September 30th.
"Our top priority as we’ve gone through the pandemic is to restore confidence in consumer travel and their travel behaviors and we believe distance on board the plane, having that middle seat open, having that seat next to you vacant is an important factor in not just the comfort of the flight but also the safety of the flight," Bastian said. "We want consumers to feel as confident as they do already with us in their flight safety as compared to their personal safety.”
Bastian said that he has been on roughly 30 flights since March and that it has been a "great experience with all the protocols" overall and that "the customer experience is better than its ever been."
While he acknowledged that there has been initial apprehension, he noted that Delta's satisfaction scores are up 20 full points and that many customers have come up to him to express their happiness with the airline's measures.
"There’s certainly, the first time back, there is some apprehension as people get back into the environment. But more and more people as they take that second, third and fourth trip, they’re telling us that we’re doing a great job," Bastian said. "And its a discerning customer, it’s someone that they’re watching to make certain that we’re implementing all the protocols that we tell the people we’re doing and our team is doing a great job of that."
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Ultimately, Bastian believes that a full return to normal hinges on the availability of an effective vaccine.
"When that vaccine is in place, and there will be a series of vaccines hopefully over the course of the next 6 to 12 months, we're going to see travel come back at a meaningful level," Bastian said. "I think it's going to take two to three years to get consumer behaviors back, but we do know there is a tremendous amount of pent up demand for transporation, for travel, for mobility and we're ready to serve customers when they're ready to go."
Bastian's comments come on the heels of a report by the International Air Transport Association (IATA) Tuesday, who estimate air travel will not return to full levels until 2024.