Delta is offering many of its flight attendants and other frontline employees early retirement and buyout packages with severance pay and health and travel benefits, making a bid to downsize and avoid layoffs this fall.
The buyout packages were laid out in an internal bulletin to employees early Thursday morning obtained by Thrifty Traveler. Some 30,000 employees are eligible for the buyouts, CEO Ed Bastian said in an internal town hall employees this week, but pilots aren't included. Bastian said the airline will make a similar offer to pilots within the next week.
Delta's buyout offers vary based upon seniority. An “enhanced retirement program” is reserved for Delta employees nearing retirement or with 25-plus years at the airline, with richer benefits like two years of fully paid health care and retiree travel benefits for life. All other employees are eligible for a slimmer package, with a year of health coverage and slightly smaller travel benefits.
The terms of Delta's two buyout offers
The airline hasn't said how many buyouts it hopes to secure in order to avoid layoffs.
“I’m often asked for specifics about how small Delta will need to be over the next couple of years. The fact is, right now we simply don’t know,” Bastian said in a separate internal memo to employees. The only thing we can be sure of today is that the more people choose to depart voluntarily, the greater our chances for avoiding furloughs this fall.”
Delta employees can make their buyout decisions starting June 10 through July 13. Anyone who takes a buyout will likely leave the company in August.
Breaking Down the Buyouts
A longtime Delta flight attendant who asked not to be named said these buyout packages are far more generous than anything Delta has offered in the past – and a sign of just how desperate Delta needs to downsize.
The travel benefits, in particular, “will be a big hit,” the flight attendant said. They're a massive step up from what Delta typically offers its exiting employees. Still, for many flight attendants, it will come down to just how much Delta decides to offer in severance pay.
“Nothing like this has been offered at Delta before,” the flight attendant said. “For the flight attendants ready to retire soon, I think this will be enough to clinch their decision.”
The financial rescue package passed by Congress and signed into law in March requires airlines to avoid involuntary furloughs or layoffs through September. But Delta and other airlines are looking beyond October and seeing the need to shrink drastically to survive.
Travel in the U.S. is down by nearly 90% since coronavirus struck, and Delta has said its ticket sales are still down by 75% compared to this time last year. The airline is losing $40 million a day. There are signs that travel is slowly inching back to life, but that improvement clearly isn't enough for airlines to continue without serious changes – and reductions.
American Airlines is also seeking buyouts to avoid layoffs, saying it will cut up to 30% of management staff unless they leave voluntarily by Oct. 1.
Good evening. @AmericanAir told employees it will cut 30% of management workers. Employees can leave voluntarily before Oct. 1, or take their chances. Also, management employees must take half their vacation days by 9/30. Don't let news of a recovery fool you. This is a slog. pic.twitter.com/LwxakMtmXr
— Brian Sumers (@BrianSumers) May 28, 2020
Lead photo courtesy of Delta News Hub via Flickr
I know that Delta and other airlines did the right thing in extending reservations/and or gave refunds to those who purchased tickets and had to cancel not knowing what was going to unfold the past months. I personally had to cancel travel plans from Ohio to Arizona due to Covid19. I want to travel, my kids live 1000 and 2300 miles from me on the other side of the US. What is stopping me from booking a reservation? The fact that I work in a nursing home, and we never know when we will get hit with this virus. I make a measly $14 an hour, I can not afford to book a trip knowing that this virus is out there and knowing I could be exposed at any time and have to cancel my trip. If there were some type of safety net for me with my reservation, such as paying a $25 fee for the option of rescheduling up to a year with no fees should my plans be impacted in the future, then I would book a trip this week. There has to be a way that people can still make travel plans, and still be protected from losing their money.
Thank you Delta for doing the right thing.
Sincerely,
Marie Burch
You are loosing paying customers because shrinking leg room. Packing people in cabins like cattle in boxcars. Southwest has a lot more room. Think about it.