Delta Air Lines is preparing to send warnings to more than 2,500 pilots about possible licenses. Along with this, the airline has reached an agreement with its pilots union on early retirement options, as the airline seeks to downsize amid lower travel demand and large losses.
Preparing for permits
CNBC reports that Delta is preparing to send warnings to 2,558 pilots about possible licenses. At the same time, Delta also reached an agreement with its pilots union on early retirement options. The early retirement option is a voluntary course of action that, along with unpaid leave, will help Delta reduce its staff amid a need for reductions.
Delta confirmed the notices to Simple Flying and discussed early retirements:
“Delta and ALPA continue to discuss significant options to reduce or prevent pilot licenses. In an effort to better prepare our pilots in the event that permits are needed, Delta will send required notices to approximately 2,500 pilots to inform them of a possible permit. Delta and the Air Line Pilots Association have agreed on a pilot-specific early retirement program. As we work to manage the impact of the pandemic and align personnel with anticipated flight demand, this voluntary early departure plan, along with other similar programs for all Delta employees, is a significant next step. ”
Delta hoped to minimize permits
Earlier this month, Delta was working with its unions to avoid permits for more than 2,300 pilots. While the number has grown slightly since then, the airline is still doing its best to avoid permits. The airline’s policy has always been to focus on reducing the unintended part of job or license cuts. This has led airlines to offer some incredibly attractive early retirement packages.
Why licenses?
In a webcast seen by Simple Flying, American boss Doug Parker noted that the permits are part of the “old airline playbook.” For pilots especially, permits are attractive to airlines. Letting pilots go is difficult as they require a lot of training and are a great investment for carriers. The airline does not have to formally abandon pilots, but in essence it can retain enough pilots for when it recovers some of the passenger demand. Meanwhile, it maintains a thin airline’s payroll and is part of a cost-cutting movement.
Right now, Delta pilots are protected from permits and layoffs until Oct. 1, when federal payroll support runs out. After that, two things are working against the pilots. Not only is there no government support, but winter is coming.
In addition to the holiday season, winter is one of the worst for airlines with low travel demand. This is especially true now that many leisure destinations are no longer attractive, especially in Europe and the northern United States. Delta has already indicated that it will be much smaller when fall arrives. The MD series has already been retired and the airline is planning the last 777 flights in the fall. This only reduces Delta’s fleet count by more than 60 aircraft compared to pre-crisis levels.
Even among the planes Delta will fly in the future, until the summer of 2021, the airline will not need all of that capacity. Some will undoubtedly remain parked and, with delayed new aircraft deliveries and four A350 acquisitions canceled, some of Delta’s pilots may not have the option to fly other aircraft or retrain for a few months.
Finally, there is still time for the situation to unfold differently. While demand has begun to return, it is nowhere near the levels that airlines will need to make a profit. Furthermore, the airline may have to cut more flights as the crisis continues to unfold. Until we are past the current crisis, it will be a difficult path for executives and employees as carriers reduce daily burns in cash and try to chart a successful path forward.
