An airline trade group that represents major U.S. carriers including Delta Air Lines is expected to tell lawmakers that the industry remains “in dire straits” and is in urgent need of billions of dollars more in government financial support. The plea comes just days after it was revealed that Delta paid out bonuses to an unspecified number of managers of as much as $250,000 in at least one case.
The one-off bonus payments, which were doled out to dozens of managers even as thousands of other Delta staffers have their paid working hours cut by up to 25 per cent, were first revealed by Gary Leff who runs travel industry blog View from the Wing.
Around 18,000 Delta workers also accepted buyouts or early retirements and around 50,000 took extended periods of voluntary unpaid leave to help the Atlanta-based airline through the pandemic. The high uptake of voluntary measures, along with salary cuts helped Delta avoid involuntary furloughs.
Chief executive Ed Bastian said it was an issue of “fairness” that managers should receive bonus payments even as the airline presses for more taxpayer funds to pay lower-paid workers. Frontline employees like flight attendants and airport staff will not receive a bonus.
“Fairness is one of the fundamental values we share at Delta, as is our mandate to always do right by our people,” Bastian told workers in a memo soon after the bonus scheme was leaked. “That’s why we made the decision to make a one-time adjustment payment to better align the percentage impact to overall compensation for everyone below the executive officer level.”
According to a Delta insider Grade 8-10 managers will receive $8,000, while a senior vice president could earn a windfall of as much as $25,000. General managers are set to receive up to $25,000, while directors could receive between $25,000 and $250,000 under the bonus scheme.
Bastian said the payments would return manager earnings to between 70 and 80 per cent of pre-pandemic levels. Manager salaries had been slashed by half at the start of the pandemic to help the airline cut costs.
But Nick Calio, president and chief executive of Airlines 4 America, a trade group that represents big U.S. airlines including American, United and Delta Air Lines is set to tell the House Transportation and Infrastructure’s aviation subcommittee on Tuesday that airlines deserve billions of dollars more in financial assistance.
Without a further $14 billion in taxpayer-funded payroll support, thousands of aviation workers will “lose their jobs — or experience reductions to wages and benefits — effective April 1,” Calio will tell the committee according to testimony seen by Reuters.
The “funding is an explicit recognition that the industry remains in dire straits, even before factoring in the certainty that it will be inundated with debt for years to come,” the testimony continues.
Delta alone has already received more than $5 billion in payroll support.
“As the company has not yet reached its zero daily cash burn target, and many employees are still shouldering financial burdens brought on by the pandemic, we find these bonuses are ill-timed and tone-deaf, especially for a management team that has stressed the need for shared sacrifices throughout the pandemic,” Jason Ambrosi, chairman of the Air Line Pilots Association unit at Delta noted.
Delta plans to slowly start bringing back pilots who were put onto ‘inactive status’ later this month but the process to get every pilot back to work won’t be complete until the fall.
Photo Credit: Jan Rosolino via Unsplash
Mateusz Maszczynski honed his skills as an international flight attendant at the most prominent airline in the Middle East and has been flying throughout the COVID-19 pandemic for a well-known European airline. Matt is passionate about the aviation industry and has become an expert in passenger experience and human-centric stories. Always keeping an ear close to the ground, Matt's industry insights, analysis and news coverage is frequently relied upon by some of the biggest names in journalism.