Delta can avoid most job cuts but still supports more government aid, CEO says

By Tracy Rucinski

CHICAGO (Reuters) - Delta Air Lines <DAL.N> will avoid involuntary furloughs for frontline employees on Oct. 1 except for pilots, but will continue to reduce work hours and executive pay through the end of the year, Chief Executive Ed Bastian said in a memo to employees on Tuesday.

Delta's major rivals American Airlines <AAL.O> and United Airlines <UAL.O> have warned that more than 40,000 frontline jobs are at risk without an extension of federal aid that has kept employees on payroll through this month as airlines suffer a deep downturn due to the coronavirus pandemic.

Atlanta-based Delta can avoid furloughs because of strong demand for voluntary programs that have lightened its staffing and a 25% reduction in work-hours, which it is extending through the end of the year, Bastian said in the memo, which was reviewed by Reuters.

In addition, Bastian will forego his salary and continue to reduce officers' salaries by 50% this year.

Bastian said Delta has "effectively managed" its staffing between now and the start of peak summer 2021 travel but continues to support an extension of government aid to help protect airline industry jobs, including those of its pilots.

"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," he said.

Delta continues to fly just 30% of the passenger volumes it had at the same time last year and is currently burning about $750 million in cash a month, he said, adding: "It’s clear the recovery will be long and choppy."

(Reporting by Tracy Rucinski; Editing by Steve Orlofsky)