After coronavirus stimulus passes, Delta, United say no pay cuts or furloughs
The stimulus package earmarks $25B in funds to assist U.S. airlines with payment of employee salaries and benefits
Capacity and traffic amid airlines has been cut due to the coronavirus. FOX Business’ Susan Li with more.
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The CEOs of United and Delta Air Lines said Thursday that employees are safe from pay cuts or involuntary furloughs in the coming months following Congress’ passage of a $2.2 trillion coronavirus stimulus package that includes relief for the embattled U.S. airline companies.
The stimulus package earmarks $25 billion in funds to assist U.S. airlines with payment of employee salaries and benefits, $25 billion toward loans and additional tax relief measures. In a memo to employees, Delta CEO Ed Bastian noted that the funding will protect employees from pay cuts or furloughs through Sept. 30, 2020.
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“During the past few weeks I have had multiple conversations on a daily basis with our nation’s leaders about the need for emergency relief,” Bastian wrote. “They recognize the leading role the airlines and our people will play in the coming recovery when the COVID-19 (coronavirus) crisis recedes. I thank our leaders for their quick and strong response to this challenge.”
President Trump says the airline industry is vital to the United States' economy.
The Trump administration and various state governments imposed sweeping travel restrictions and social distancing protocols in recent days to slow the spread of coronavirus. The measures, while necessary for public health, have decimated business for U.S. airlines and various other industries, prompting carriers to make significant cuts to employee hours and flight capacity.
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More than 21,000 Delta employees have agreed to voluntary unpaid furloughs during the interruption to normal business. Bastian asked employees to consider taking a leave of absence, noting that Delta needs “more volunteers.” The company has taken other measures to cut back on expenses, such as pay cuts for top executives and directors.
United Airlines CEO Oscar Munoz and President Scott Kirby also addressed the stimulus package in a message to employees. The executives said United would not conduct involuntary furloughs or pay cuts for U.S. employees until Sept. 30.
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Munoz and Kirby noted they “expect demand to remain suppressed for months after that, possibly into next year” due to the ongoing impact of coronavirus. The airline has cut its April flight schedule by more than 60 percent.
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United executives warned that a slow recovery from the coronavirus crisis could result in job cuts in the future.
“We will continue to plan for the worst and hope for a faster recovery but no matter what happens, taking care of each of our people will remain our number one priority,” Munoz and Kirby said. “That means being honest, fair and upfront with you: if the recovery is as slow as we fear, it means our airline and our workforce will have to be smaller than it is today."