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Delta to Cut Capacity 40%

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Delta to Cut Capacity 40%

Old 13th Mar 2020, 19:51
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Delta to Cut Capacity 40%

From a company memo issued today:

Ed Bastian to Delta Colleagues Worldwide

The Challenge Facing Us - COVID-19 Impact Growing Rapidly

Earlier this week, I updated you on the steps we are taking to protect our people, our customers and our business amid the COVID-19 (coronavirus) outbreak. In just the few days since, the situation has worsened considerably, with large public events cancelled, businesses suspending travel, and popular destinations facing heightened government travel restrictions, including a 30-day ban to continental Europe announced Wednesday night.

Demand for travel is declining at an accelerated pace daily, driving an unprecedented revenue impact. Cancellations are rising dramatically with net bookings now negative for travel over the next four weeks. To put that in perspective, we’re currently seeing more cancellations than new bookings over the next month.

The speed of the demand fall-off is unlike anything we’ve seen – and we’ve seen a lot in our business. We are moving quickly to preserve cash and protect our company. And with revenues dropping, we must be focused on taking costs out of our business.

In order to do this, we are taking difficult but determined actions to protect the financial position of the company.

These include:
  • An overall capacity reduction in the next few months of 40 percent – the largest capacity reduction in Delta’s history, including 2001.
  • Elimination of flying to continental Europe for the next 30 days, which could be extended. We will maintain service to London.
  • Parking up to 300 aircraft as our reduced capacity requires a substantially smaller fleet.
  • Deferring new aircraft deliveries to manage our reduced capacity and preserve cash.
  • Reducing capital expenditures by at least $2 billion for the year, including delaying aircraft mods, IT initiatives and other opportunities to preserve cash.
  • Immediately offering voluntary short-term, unpaid leaves as well as an immediate hiring freeze.
  • Substantially reducing the use of consultants and contractors.
We’ll be making more critical decisions on our response in days to come. The situation is fluid and likely to be getting worse. But what hasn’t changed is this: Delta remains better-positioned to weather a storm of this magnitude than ever before in our history. We’ve spent a decade building a strong, resilient airline powered by the best professionals in the business. We will get through this, and taking strong, decisive action now will ensure that we are properly positioned to recover our business when customers start to travel again.

In coming days and weeks, every one of us will have an opportunity to contribute to Delta’s durability. That ranges from considering a voluntary leave that works for you and your family, to identifying opportunities to save money in your division or department, to volunteering for the Peach Corps to help our customers and colleagues at the airport. I ask all of you to see what you can do to help us save cash.

In light of these developments, I’m foregoing 100 percent of my salary, effective immediately, for the next six months.

We are in discussions with the White House and Congress regarding the support they can provide to help us through this period. I’m optimistic we will receive their support. That said, the form and value is unpredictable, and we can’t put our company’s future at risk waiting on aid from our government.

Above all, nothing is more important than the care, safety and health of our customers and each other. That includes the many steps we are taking to keep our planes and facilities clean and disinfected, as well as our never-ending commitment to flight safety even among these distractions. We need to assure our customers it is safe to fly in all respects, now more than ever. We also understand the need for social distancing as a means to protect our customers and each other, and we encourage all of our people to be mindful of every opportunity to reduce the risk of transmission at work and in your daily lives. This is a severe crisis.

I know many of the newer members of the Delta family have never experienced this level of uncertainty in our business. Your veteran colleagues will tell you that we have been through turbulent times before, and what has always carried us through has been our commitment to our values, our culture and each other. I am confident that we will emerge from this crisis as a strong, trusted global brand that truly connects the world like no other. And we will be stronger for having gone through this experience.

I continue to be honored and humbled to lead this team. I will give you another update early next week. Thank you for all that you are doing, and will continue to do in the days ahead, to care for the Delta family and our customers.

Ed
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Old 13th Mar 2020, 20:25
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Yes, they've also stopped all pilot interviewing including those already given interview dates. They'll be "reinvited" at some future time. People were told to continue updating applications since Delta will continue reviewing applications during this hiatus.

Scuttlebutt is that they'll honor the firm class dates already given to applicants through the end of April. I think that's about 100ish pilots. We'll see about that one. I hope those with job offers don't get "Uniteded".

Tough times...
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Old 13th Mar 2020, 20:37
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No flying to continental Europe, will continue serving London. No mention of other UK airports, or Irish ones. I'm guessing they're getting the chop so
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Old 13th Mar 2020, 21:32
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Especially not flying to AMS is a pretty big deal.
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Old 13th Mar 2020, 21:38
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Originally Posted by procede
Especially not flying to AMS is a pretty big deal.
Given the absolute mess the Dutch government have made of things, it is prudent though. Telling people only those with symptoms were contagious despite overwhelming evidence to the contrary....morons.
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Old 13th Mar 2020, 22:12
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As with many current U.S. pilot contracts, it appears that the Delta PWA (Pilot Working Agreement) allows furlough without notice or much additional pay under some circumstances.

From Section 21 - Furlough and Recall:

B. Furlough
...

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Old 14th Mar 2020, 00:38
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I just booked some tickets on Delta at very good prices. Not worried even with the cuts, because I know they will take care of me.
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Old 14th Mar 2020, 01:04
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I love how a guy in his position with undoubtedly millions in the bank makes a statement of forgoing his salary for 6 months. Wake up mister, you in the privileged list, I'm sure you could live comfortably for the rest of your life on the money you've banked from your salary. But the reality is 99% of your workers can't, so how about taking a permanent salary cut and sharing the remainder out amongst your lowest paid employees and making things a bit more equal for them, so when the sh1t hits the fan, the folks who can't afford to save now have half a chance to save in the future You make me puke with your hypocrisy sir.
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Old 14th Mar 2020, 03:04
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Originally Posted by avtur007
I love how a guy in his position with undoubtedly millions in the bank makes a statement of forgoing his salary for 6 months. Wake up mister, you in the privileged list, I'm sure you could live comfortably for the rest of your life on the money you've banked from your salary. But the reality is 99% of your workers can't, so how about taking a permanent salary cut and sharing the remainder out amongst your lowest paid employees and making things a bit more equal for them, so when the sh1t hits the fan, the folks who can't afford to save now have half a chance to save in the future You make me puke with your hypocrisy sir.
It's a token. He's making a sacrifice at the same time he's inviting others to make a sacrifice. That's good.

He isn't trying to solve global inequality or reinvent capitalism.
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Old 14th Mar 2020, 11:02
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Originally Posted by Turbine70
It's a token. He's making a sacrifice at the same time he's inviting others to make a sacrifice. That's good.

He isn't trying to solve global inequality or reinvent capitalism.
agree but.....

I don't care about tokens. I care about how it affects me, not him
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Old 14th Mar 2020, 11:32
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Originally Posted by Turbine70
It's a token. He's making a sacrifice at the same time he's inviting others to make a sacrifice. That's good.
Alex Cruz at BA is talking about job cuts etc. and I don't recall hearing about any offer from him to even forego a week's salary. Which person deserves more respect?
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Old 14th Mar 2020, 13:59
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Originally Posted by bafanguy
Yes, they've also stopped all pilot interviewing including those already given interview dates. They'll be "reinvited" at some future time. People were told to continue updating applications since Delta will continue reviewing applications during this hiatus.

Scuttlebutt is that they'll honor the firm class dates already given to applicants through the end of April. I think that's about 100ish pilots. We'll see about that one. I hope those with job offers don't get "Uniteded".

Tough times...
The next step will be furloughs and likely quite soon.
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Old 14th Mar 2020, 15:44
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Originally Posted by aterpster
The next step will be furloughs and likely quite soon.
In some companies they they call it a freedom to take a leave-of-absence without pay,
magnanimous of them
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Old 14th Mar 2020, 16:00
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Originally Posted by aterpster
The next step will be furloughs and likely quite soon.
aterpster,

That's always a possibility in these situations. But DL and ALPA have come to a LOA regarding the virus stuff where, among other things, Special Incentive Lines are offered where you get 55 hours pay/month for staying home. And sick leave policy has been adjusted to where, IIUC, calling sick will not come out of one's sick leave bank. I suppose you could say they're trying to adjust as painlessly as they can.

Beyond that it's all up for grabs. Nothing would surprise me under the circumstances.

Last edited by bafanguy; 14th Mar 2020 at 18:38.
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Old 14th Mar 2020, 17:12
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Originally Posted by lomapaseo
In some companies they they call it a freedom to take a leave-of-absence without pay,
magnanimous of them
What exactly is a furlough? Could you call it 'forced unpaid leave'? Genuine question as we don't use the word over here.
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Old 14th Mar 2020, 17:31
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Originally Posted by bafanguy
Special Incentive Leaves are offered where you get 55 hours pay/month for staying home.
Are you sure about that? I thought that had been debunked as a false rumor. Iím not saying youíre wrong - Iíve just heard both versions and donít know which is true...
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Old 14th Mar 2020, 17:37
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Originally Posted by giggitygiggity
What exactly is a furlough? Could you call it 'forced unpaid leave'? Genuine question as we don't use the word over here.
As someone who grew up in England and has worked 21 years in America, I would say thatís a pretty accurate description. Furloughs are typically fairly long term - months, even years but donít have to be. You are free to claim unemployment and seek work elsewhere. Sometimes youíll be told you canít work for a competitor but not always. Think of it as redundancy with a right to be called back, and callbacks typically happen in seniority order. If you do get called back you can say no if youíve moved on to something better. An employer can also let you keep some benefits while youíre out, for example in the case of an airline they can let you keep staff rate travel etc. Hope that helps.
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Old 14th Mar 2020, 17:40
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President Trump just said that a ban on travel from the UK and Ireland will be announced soon. He also said that domestic travel restrictions are currently being considered.
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Old 14th Mar 2020, 18:21
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Originally Posted by MichaelKPIT
Are you sure about that? I thought that had been debunked as a false rumor. I’m not saying you’re wrong - I’ve just heard both versions and don’t know which is true...
Michael,

I'm always prepared to be wrong and try to practice frequently to be ready for it. This time I might be right though. How many take it is yet unknown. This from LOA 20-01:

3. Special Incentive Line For the May and June 2020 bid periods, the parties agree to reinstate Special Incentive Line (“SIL”) LOA #2 and amend as follows:

Delete Paragraph 2. 3)Amend Paragraph 9. a) to read:a)a pilot will receive a SIL guarantee of 55 hours of pay and credit at his applicable composite hourly rate.
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Old 14th Mar 2020, 18:34
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Originally Posted by MichaelKPIT
As someone who grew up in England and has worked 21 years in America, I would say thatís a pretty accurate description. Furloughs are typically fairly long term - months, even years but donít have to be. You are free to claim unemployment and seek work elsewhere. Sometimes youíll be told you canít work for a competitor but not always. Think of it as redundancy with a right to be called back, and callbacks typically happen in seniority order. If you do get called back you can say no if youíve moved on to something better. An employer can also let you keep some benefits while youíre out, for example in the case of an airline they can let you keep staff rate travel etc. Hope that helps.
Thanks, good description. I dont think we have anything quite the same as that over here, just unpaid leave or redundancies. Either way, we're all f***ed.
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