Pilots at Delta Air Lines have agreed to cost cuts in an attempt to avoid more furloughs, as the Atlanta-based airline still reels from the coronavirus pandemic.
Delta MEC, a union that represents 12,900 of Delta's pilots and is part of the broader Air Line Pilots Association (ALPA), said its members voted in favor to no furloughs through Jan. 1, 2022. Previously, Delta said it would furlough slightly more than 1,700 pilots starting Nov. 28, had the agreement not been reached.
The pilots affected will receive 30 hours of pay per month based on the 717B category and will receive benefits from the company, treated as if they are active employees. In exchange for a no-furlough clause, Delta gets some temporary flexibility around staffing.
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“We’re very pleased that we were able to avoid furloughs at Delta and also secure contractual gains for all pilots on the seniority list,” said First Officer Chris Riggins, Communications Committee Chairman, in a statement obtained by FOX Business. “This agreement will help Delta navigate the COVID crisis and emerge a stronger airline in the end. Pilots, as long-term stakeholders in our Company, have stepped up to the plate once again to help Delta weather this crisis.”
Other parts of the deal include Delta working with the ALPA for additional benefits for the pilots, including the ability to contribute more money into a tax-deferred plan, known as a Market Based Cash Balance Plan. The pilots will also receive a permanent change to required monthly flying, the ability to get more overtime and other benefits for commuting.
The news comes just one month after Delta, led by CEO Ed Bastian, and the pilots union reached an agreement in principle on the furlough avoidance.
In October, Delta reported a $5.4 billion loss for its third fiscal quarter of 2020. Passenger volume was down more than 70% compared to the same quarter one year ago. At the time, Delta CEO Ed Bastian warned the airline would furlough roughly 1,700 pilots without a cost-cutting agreement with union representatives or additional government relief.
Air carriers have lobbied Congress for additional relief as they contend with revenue shortfalls during the coronavirus pandemic. Under the CARES Act, airlines received $25 billion in aid and were prohibited from further furloughs until Oct. 1.
Shares of Delta were off less than 0.2% to $41.19 in Wednesday trade.
FOX Business' Thomas Barabbi contributed to this story.