Delta Air Lines Inc. (DAL) recently made an agreement with its pilots related to their job security. The pilots have agreed to work on lower wages until 2022, and in return, the company will not furlough them.
The airline industry was one of the hardest-hit industries from the Covid-19 outbreak. Major U.S. airlines, including Delta, have incurred heavy losses due to travel restrictions imposed by governments around the world to limit the spread of coronavirus.
The pilot union and Delta announced that the cost-cutting deal would avoid furloughs of more than 1,700 pilots announced by the company last week. According to the terms of the agreement, Delta will pay 30 hours wage to its pilots on monthly basis, even though they will not fly.
Delta will also have the right to decrease the minim guaranteed work hours of the pilots in the subject by up to 5 percent. In return, the company vowed that it will not plans any furloughs till January 2022.
Major airlines are left with no choice but to reduce both costs and workforce according to the fading travel outlook. The global airline industry is expected to lose more than $38 billion even if the restrictions are removed, according to the International Air Transport Association (IATA).
Earlier this year, the U.S. government released funding for airlines on certain terms, one of which barred them from planning furlough until October. The companies were looking to get more funding from the government, but that did not happen due to certain reasons.
Some other airlines are also planning to furlough their employees as they continue to be a burden on the companies. For instance, Southwest Airlines has recently warned its employees about potential furlough in case they do not agree to lower wages.
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