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Delta has a 'real shot' of avoiding layoffs thanks to VLO

Delta has a 'real shot' of avoiding layoffs thanks to VLO

Old Jul 16, 20, 12:43 pm
  #1  
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Delta has a 'real shot' of avoiding layoffs thanks to VLO

I wasn't sure if this should go into the thread about the earnings report or not:
Delta Air Lines CEO Ed Bastian said on Thursday that the company has a "real shot" of avoiding layoffs because 20 percent of the workforce voluntarily agreed to retire amid the coronavirus pandemic.
More than 17,000 employees agreed to retire, Bastian told Fox Business when asked what heís doing to avoid layoffs. Delta employed nearly 90,000 people at the beginning of 2020.
The source for the information is:
https://thehill.com/business-a-lobby...oiding-layoffs
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Old Jul 17, 20, 6:22 am
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Amazing news. Looks like it having good employee relations may be not a bad idea, after all...
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Old Jul 17, 20, 6:17 pm
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It could get very interesting in the early autumn if DL is on course for zero burn and hasn't even sent out a WARN notice, and even moreso if B6, WN, or AS are in a similar situation. One can expect the senators and reps from GA/MI/MN/UT/MA/WA/NY to fight against a second round of CARES aid for AA and UA or get conditions imposed on the aid that make airlines think twice about taking it... would have to imagine that Schumer or Warren would appreciate the chance to decry taxpayer dollars footing the bill for champagne in first class.
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Old Jul 18, 20, 1:36 am
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All of the airlines are somewhat exaggerating cash burn to preserve a fiscal environment favorable to more stimulus if necessary. I wouldn't be surprised if DL could be at 0 cash burn within a month if need be, even though they have yet to sign a term sheet on a Fed loan (that would require the DL to issue warrants to the gov't).

UA and AA have sent WARNs. DL had a free pass after UA announced to send with minimal equity consequence. The fact that they've let the equity consequence window lapse makes me think they'll get workforce reduction voluntarily.

Meanwhile, no one has mentioned WN, which has never laid off employees in their entire history but has signaled impending WARN notices.
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Old Jul 18, 20, 7:00 am
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The 17,000+ who have signed up for the package so far are all the non-pilot employees (Res, ACS, Inflight, Management etc). Word around the water cooler is that some departments fared well, while others still have an excess. They think they can manage this by offering temporary internal transfers to prevent some or all furloughs (e.g., if lots of Reservations folks retire but there are an excess of FAs, the latter could be offered temp positions in Res etc.).

The pilots received a WARN notice that there could be up to 2,550 furloughs and their retirement package sign-up deadline is July 19. According to rumors, it's up to about 1,900 people so far (so if that's the max and no one else pulls out, we're potentially looking at 650+ pilot furloughs). Reuters reported yesterday apparently that Delta has offered the pilots a possibility of no furloughs if they agree to waive their minimum hours/pay for a few months:

https://finance.yahoo.com/news/delta...215723914.html
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Old Jul 18, 20, 9:49 am
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Originally Posted by ekozie View Post
All of the airlines are somewhat exaggerating cash burn to preserve a fiscal environment favorable to more stimulus if necessary. I wouldn't be surprised if DL could be at 0 cash burn within a month if need be, even though they have yet to sign a term sheet on a Fed loan (that would require the DL to issue warrants to the gov't).

UA and AA have sent WARNs. DL had a free pass after UA announced to send with minimal equity consequence. The fact that they've let the equity consequence window lapse makes me think they'll get workforce reduction voluntarily.

Meanwhile, no one has mentioned WN, which has never laid off employees in their entire history but has signaled impending WARN notices.
Why do you think DL is lying? A quick look at the financials puts that at an operating loss of $4.8B in the quarter. Thatís a rough average operating loss of $52M/day.

Not all that far fetched when they started the quarter saying about $100M/day and ended around $30M/day.

They stuck restructuring charges into this quarter so if take those out for the 2H, cut the salary number in half, project slightly higher full quarter revenue (because while traffic has plateaued but this number includes the awful April number), you can see a path to a breakeven operating cost which is almost certainly what they are calling their cash burn.

Fairly similar on the cash flow statement.
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Old Jul 20, 20, 12:05 am
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This is great news. Losing a job is just incredibly painful if one needs it.
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Old Jul 20, 20, 9:05 pm
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Originally Posted by ClipperDelta View Post
The 17,000+ who have signed up for the package so far are all the non-pilot employees (Res, ACS, Inflight, Management etc). Word around the water cooler is that some departments fared well, while others still have an excess. They think they can manage this by offering temporary internal transfers to prevent some or all furloughs (e.g., if lots of Reservations folks retire but there are an excess of FAs, the latter could be offered temp positions in Res etc.).

The pilots received a WARN notice that there could be up to 2,550 furloughs and their retirement package sign-up deadline is July 19. According to rumors, it's up to about 1,900 people so far (so if that's the max and no one else pulls out, we're potentially looking at 650+ pilot furloughs). Reuters reported yesterday apparently that Delta has offered the pilots a possibility of no furloughs if they agree to waive their minimum hours/pay for a few months:

https://finance.yahoo.com/news/delta...215723914.html
Not likely FA's would work in temporary ground positions. One doesn't just "roll-over" into a whole different work group. Reservations takes about six weeks of training, customer service is probably about four weeks and they would have to transfer to various places to do these jobs.
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Old Jul 20, 20, 9:31 pm
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Best of luck but I can't see the pilots agreeing to any concessions. There are some still complaining about what they gave up after 9/11.
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Old Jul 21, 20, 3:00 am
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Originally Posted by FlyingNone View Post
Not likely FA's would work in temporary ground positions. One doesn't just "roll-over" into a whole different work group. Reservations takes about six weeks of training, customer service is probably about four weeks and they would have to transfer to various places to do these jobs.
Will have to disagree here. There are many, many cases of inter-departmental transfers within Delta among IFS, ACS and Res. There are plenty of current Delta FAs who came from ACS for example. Four to six weeks training is nothing in the current climate where people may not have enough work to do anyway. The only obstacle may be whether an FA wants to temporarily work as a GA or in Res (since they signed on to be an FA in the first place). These measures will be taken to transition staff from IFS to ACS/Res if it means preventing or minimizing involuntary furloughs.
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Old Jul 21, 20, 6:58 am
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For a few, cross training might be an effective career path to higher positions in the company.

Does anyone know what the normal pay differentials would be for the various groups, i.e., relatively inexperienced FA versus GA or reservation (phone) agent? Call center agents often work from home, so they could be located anywhere with an appropriate internet connection and equipment, but training in person might be preferred. Most FAs already live close to a major airport (but not necessarily their FA base, as many commute by plane to work), so airport positions wouldn't be precluded, although the distribution of FA residences might not correspond well to where DL needs airport staff.
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Old Jul 21, 20, 7:15 am
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Originally Posted by ClipperDelta View Post
Will have to disagree here. There are many, many cases of inter-departmental transfers within Delta among IFS, ACS and Res. There are plenty of current Delta FAs who came from ACS for example. Four to six weeks training is nothing in the current climate where people may not have enough work to do anyway. The only obstacle may be whether an FA wants to temporarily work as a GA or in Res (since they signed on to be an FA in the first place). These measures will be taken to transition staff from IFS to ACS/Res if it means preventing or minimizing involuntary furloughs.
I am surprised DL would let so many people leave voluntarily with incentives to the extent they will be short-staffed in some departments and have to train replacements. They would not only be paying the incentives for current employees to leave but also training the replacements, which costs even more money.
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Old Jul 21, 20, 8:44 am
  #13  
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AFAIK in the USA you can't offer individually targeted early retirement etc. incentives as this could be viewed as discriminatory, so it would have been difficult for DL to fine tune the offers to current positions and skill sets. Everyone in a broad employee class is offered the same package and it can be difficult to control or predict who accepts the offer.
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Old Jul 21, 20, 11:08 am
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Originally Posted by MSPeconomist View Post
For a few, cross training might be an effective career path to higher positions in the company.

Does anyone know what the normal pay differentials would be for the various groups, i.e., relatively inexperienced FA versus GA or reservation (phone) agent? Call center agents often work from home, so they could be located anywhere with an appropriate internet connection and equipment, but training in person might be preferred. Most FAs already live close to a major airport (but not necessarily their FA base, as many commute by plane to work), so airport positions wouldn't be precluded, although the distribution of FA residences might not correspond well to where DL needs airport staff.
Gate Agents and Res Employees are on the same payscale, and is far less hourly than a flight attendant. Granted, when comparing the hours worked each month, the monthly take home is about the same.

Res Agents can't work from home anywhere, they must be within a few hours of an existing res center. Work from home also typically isn't offered until the agent has been working for several months, and isnt guaranteed... interested employees have to bid for it.
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Old Jul 22, 20, 11:04 am
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Originally Posted by readywhenyouare View Post
Best of luck but I can't see the pilots agreeing to any concessions. There are some still complaining about what they gave up after 9/11.
I don't know the terms of their furloughs versus WARN notices, but I wouldn't blame pilots for not agreeing to lower base minimum pay - that concession can backfire and lower the starting point for the next bargaining session.
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