Delta Pilots Approve Deal to Avoid Furloughs Through 2021

Delta Air Lines Inc. pilots approved an agreement that will protect them from furloughs next year in exchange for cutting how much they fly.

The plan won 74% support in a vote, the Delta chapter of the Air Line Pilots Association said in an email Wednesday. The pact will trim guaranteed monthly flying time an average of 2%, or about two hours, for each pilot. Delta had warned that 1,713 aviators would be furloughed if an agreement to cut labor costs wasn’t approved.

The deal enables Delta to avoid pilot layoffs while waiting for a rebound in sales that have been gutted by the coronavirus pandemic. While demand rose this week for the Thanksgiving holiday, U.S. air travel recently has averaged less than 40% of what it was in 2019. Delta’s flying capacity this quarter is 30% to 35% of last year’s level.

“This agreement will help Delta navigate the Covid crisis and emerge a stronger airline in the end,” said Chris Riggins, an ALPA spokesman and Delta pilot. “Pilots, as long-term stakeholders in our company, have stepped up to the plate once again to help Delta weather this crisis.”

Delta fell less than 1% to $41.18 at noon in New York, in line with a Standard & Poor’s index of major U.S. carriers.

The pact includes a provision making it easier for the company’s almost 13,000 pilots to pick up flying time at premium pay once demand increases. A voluntary option allows excess retirement plan contributions each year to be put into a separate defined benefit pension program, subject to approval by the U.S. Treasury Department.

“We are grateful to keep all our pilots actively employed and provide stability for you and your families,” John Laughter, Delta’s chief of operations, wrote in an employee memo. “Our recovery will be uneven -- as evident by the recent increase in Covid rates which are affecting our bookings for the holiday season.”

About 50,000 workers at Atlanta-based Delta have taken voluntary unpaid leaves of 30 days to 12 months to help reduce labor spending. Another 18,000 chose to leave or retired early, including at least 1,800 pilots.

©2020 Bloomberg L.P.

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