Delta will offer early retirements, buyouts

Delta Air Lines plans to offer voluntary separations and early retirements to reduce its workforce after travel plummeted amid the coronavirus pandemic.

Chief Financial Officer Paul Jacobson announced the plan Tuesday, saying, “We know at the end of the day, Delta is going to be smaller than where we were, for the next few years.”

More than 41,000 of Delta’s 90,000 employees have volunteered to take unpaid leaves of up to a year, and thousands of airline contractors have lost jobs. But with passenger counts down more than 90% and expectations that a recovery could take as long as four years, the airline is looking to permanently cut payroll.

Atlanta-based Delta is restricted from involuntary furloughs until after Sept. 30 because of terms of funding from the federal CARES Act. So airlines are looking for other ways to cut labor costs — and they may still lay off workers come Oct 1. “We hope that most of the headcount changes that we’re going to need are going to be achieved through these voluntary programs,” Jacobson said.

The company wants to stop burning through cash by the end of this year. It has taken on debt to accumulate more than $12 billion in cash by the end of June. Jacobson said Delta has “seen a little bit of a bounce off the bottom,” but he said it’s difficult to draw conclusions from that. Driven by leisure bookings for June and July, “we’ve seen some days of positive net sales.” But it’s yet to be seen whether people actually take those trips. “It will be a long time I think before we start to resolve some of the concerns that people have that led to social distancing,” Jacobson said.