Delta CEO Ed Bastian told employees the airline will cut capacity by 40%, park up to 300 airplanes, as well as end all Continental Europe flying due to the Coronavirus crisis.
The Coronavirus situation is creating shockwaves through the airline industry. A bombshell situation like this has not been experienced since the post-9/11 crisis.
The situation for Delta and other U.S. airlines flying internationally has experienced a situation that has worsened considerably since President Trump announced the ending all flights to continental Europe.
Delta’s cuts go even deeper than what the airline instituted after the September 11 attacks.
Delta’s capacity cut from the Coronavirus situation
- The largest capacity reduction in the history of Delta Air Lines is about to take place. The airline plans an overall capacity reduction of 40 percent during the next few months.
- Eliminating flights to Continental Europe for the next 30 days, which, unfortunately, could be extended depending on the Coronavirus situation.
- Since the virus crisis has resulted in reduced capacity Delta will be parking up to 300 airplanes.
- The airline will defer new airplane deliveries. This to preserve cash and manage capacity.
- Delta wants to reduce capital expenditures by at least US$2 billion for 2020. That includes delaying aircraft mods, IT initiatives, and other cash preserving opportunities.
- Immediate voluntary short-term, unpaid leaves, as well as an immediate hiring freeze, is being implemented.
- A sharp reduction in the usage of consultants and contractors.
- Delta CEO Ed Sebastian will forego his entire salary for the remainder of 2020.
Are Delta employee furloughs on the horizon?
Should the Coronavirus pandemic continue to worsen the likelihood of mass-furloughs is a definite possibility. However, airlines prefer to avoid furloughs at any cost. It cost an airline a lot of money to retrain furloughed people upon recall later.
Of course, furloughs would affect employees from most departments and positions. Operating an airline is one huge machinery, with every position being critical to keeping the entire operation running smoothly.
In particular, furloughed pilot retraining is a huge undertaking, from financial as well as time-required perspectives.
Delta employs around 15,000 pilots. Parking 300 airplanes account for a big reduction in the need for pilots, into the thousands.
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