Delta (DAL) Pilots Accept Pay Cuts to Escape Furloughs
Per a CNBC report, Delta Air Lines DAL pilots have agreed to pay cuts to avoid furloughs until 2022. The carrier is making consistent efforts to reduce costs as it grapples with coronavirus-induced weak air-travel demand.
As per the deal, the carrier can cut pilots’ guaranteed hours by as much 5%. Additionally, more than 1,700 pilots will get partial pay of 30 hours a month even without having to fly. These pilots would have otherwise been furloughed at the end of the month without a deal. The Air Line Pilots Association, representing nearly 13,000 Delta pilots, said that the deal was favored by 74% of the voters.
CNBC reported that Delta has so far been able to avoid involuntary furloughs thanks to a large number of employees having accepted buyouts and voluntary leaves of absence. This is unlike its peers American Airlines AAL and United Airlines UAL. Together both these airlines have furloughed 30,000 employees following the expiration of the federal aid on Sep 30, 2020.
Separately, Delta’s chief of operations, John Laughter gave a heads up that the spike in coronavirus cases is affecting the airline’s bookings for the holiday season.
Shares of Delta have declined more than 29% so far this year primarily due to the coronavirus-led travel demand woes on its operations. Due to tepid travel demand, passenger revenues have plunged 68% in the first nine months of 2020. Revenues are likely to remain under pressure unless coronavirus concerns fade.
Delta, United Airlines and American Airlines each carry a Zacks Rank #4 (Sell).
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Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
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