Ed Bastian to Delta Colleagues Worldwide
As difficult as this crisis has been for all of us, it has revealed the strength of Delta's character and the power of our values-led culture. Together, we've focused on our three priorities: Protecting your health and safety as well as your jobs; preserving our liquidity and cash balance to get us through the crisis; and positioning Delta for the future.
The work our teams have done to ensure a safe environment on our planes, at the airport and in our workspaces is nothing short of remarkable. We have also made great strides to protect Delta jobs amid an unprecedented drop in our revenues. Every one of our workgroups has made significant contributions, including the more than 40,000 of you who voluntarily signed up for short- and long-term unpaid leaves of absence.
We had an enormous response to the enhanced early retirement and departure packages that were offered this summer, with 20 percent of our people choosing voluntary exits. While it is difficult to see so many of our colleagues leave, every one of those departures helped save Delta jobs.
In addition to the voluntary leaves and departures, the 25 percent reduction in work hours for our ground-based employees as we've scaled down the operation has also played a significant role in protecting jobs.
As a result of these actions, Delta will be able to avoid involuntary furloughs for our flight attendants and ground-based frontline employees in the U.S., as we've effectively managed our staffing between now and the start of peak summer 2021 travel. That includes our people in ACS, Cargo, Res, TechOps and In-Flight.
Avoiding involuntary furloughs in this unprecedented environment is entirely due to the innovation, hard work and shared sacrifice of our people. Our teams have done an extraordinary job identifying opportunities to spread work around and shift people into new roles that are essential to our business. A few examples of the innovative ideas that have been developed:
- Having our flight attendants support our catering efforts and participate in creative schedule options such as a Fly On/Off program, a rotating month-on, month-off schedule.
- Insourcing ACS opportunities including wheelchair handling, with more roles, including aircraft servicing, cargo handling and into-plane fueling, under consideration.
- Leveraging our MRO business and partnerships with Pratt & Whitney and Rolls Royce to secure TechOps employment.
- Deploying tactics in Res & Care to spread a huge volume of work across the team and ensuring specialists are training to handle all types of calls - protecting jobs for the future.
Unfortunately, we still expect an overage of pilots as of Oct. 1*. There still is time to mitigate this potential furlough and discussions are ongoing with the pilots' union as we continue to look for ways to cost-effectively reduce or eliminate this number.
We stand with our industry colleagues in support of an extension of the CARES Act, which would protect airline industry jobs, including the Delta pilots facing furloughs. While I'm hopeful that an agreement on an extension can be reached, the deal on a broader stimulus plan – in which the extension would be included - looks uncertain. We will continue to work with members of Congress and the Administration on a solution.
While we are all grateful for our ability to mitigate furloughs, it's important to remember that we are still in a grim economic situation. It's clear the recovery will be long and choppy. We're still flying just 30 percent of the passenger volumes we had this time last year, and are currently burning about $750 million in cash a month. Even when a vaccine is developed and distributed, it will take time for business travel to come back, because of the damage that's been done to the global economy.
Protecting Delta jobs throughout the recovery requires that we continue to aggressively manage our costs. The 25 percent work-hour reduction has been a critical part of that effort so far. For that reason, I've made the difficult decision to extend the hourly reduction for ground-based merit and frontline employees through the end of the year. I have also decided to extend the elimination of my salary through the end of this year, and all officers' salaries are being reduced by 50 percent during the same time frame.
Given the difficult economic circumstances, protecting Delta's cash position remains a key focus to allow us to endure the months ahead and emerge as a strong airline. We were happy to announce this week that we intend to raise an additional $6.5 billion in a financing transaction secured by our SkyMiles program. This money is critical to our ability to protect Delta jobs and survive a long recovery period. In addition, a healthy balance sheet and cash position will position us to emerge with the strength to grow quickly once the recovery begins.
The deal will not have any impact on our SkyMiles program or the benefits offered to our SkyMiles members. And our ability to raise money in private markets means we do not intend to take an additional loan backed by the U.S. government under the CARES Act secured loan program.
I know it's been a stressful summer for you, with worries about health and job security compounded by the global reckoning over racial inequity and injustice. I hope this news provides some reassurance and certainty for you and your loved ones in the months ahead. We'll be discussing our situation in more detail and taking your questions during our virtual Town Hall on Skyhub today – if you can, I urge you to tune in.
Amid the stress and uncertainty, your humanity is on display every day, and continues to set us apart. Here's one story we heard from a customer flying to Minneapolis:
"The entire Delta team was so helpful to me and to my disabled husband on our most recent trip. Everyone went out of their way to make sure this 90-year-old Korean War Veteran was able to board the flight safely, make connections in Minneapolis, and deplane safely to awaiting family members. The care and concern expressed by the flight attendants and other Delta team members on the flights more than exceeded our expectations. Thank you for all you do during these challenging times to make the Delta flying experience successful for our family."
I continue to be inspired every day by what you are accomplishing. I'm more confident than ever in the future that we are building together. Thank you, and please continue to stay safe and healthy – nothing is more important.
*Editor's note: After the memo was distributed, the pilot time frame was changed to Nov. 1.