DAL Delta Air Lines Inc

By Alison Sider 

Delta Air Lines Inc. will send notices next week to over 2,500 pilots warning of potential furloughs as travel demand is still languishing due to the coronavirus pandemic, the airline wrote in a letter Friday.

Delta and the union that represents its pilots reached a tentative agreement on the terms of a voluntary retirement package for the airline's pilots in an effort to reduce the number who are forced to leave.

But recovery may be at least two years away, John Laughter, Delta's senior vice president of flight operations, wrote to pilots Friday evening.

"Early retirements alone likely won't be enough to avoid pilot furloughs altogether," Mr. Laughter wrote. "Even with the increased travel demand we've seen in recent weeks, we expect revenue to be at only 25 percent of what it was last summer."

The airline and the union are also negotiating a potential agreement that could avoid furloughs altogether for two years, but Mr. Laughter said the airline wanted to notify the 2,558 pilots at risk of being cut under the Worker Adjustment and Retraining Notification Act, known as the WARN Act, to let them know of the possibility.

CNBC earlier reported the notices.

Delta has retired some fleet types altogether to conserve cash and has parked hundreds of jets due to reduced demand, leaving it with more pilots than it needs. Still, airlines have been trying to avoid letting pilots go, which triggers costly retraining and can make it more difficult for carriers to ramp back up when demand does rebound.

Airlines must keep all their workers on the payroll through the end of September under the terms of the $25 billion in federal aid they received earlier this year when the pandemic first took hold and brought travel demand to a near halt. Most airlines, including Delta, have cautioned workers they would have to cut staff when Oct. 1 arrives. Other carriers are offering similar early retirement options to their employees.

Unions representing aviation employees wrote to congressional leaders this week advocating that the payroll support funding be extended another six months, until March 31, 2021.

Delta has 7,900 pilots eligible for the early retirement offer, which includes partial pay for three years or until age 65, as well as health and travel benefits.

Write to Alison Sider at alison.sider@wsj.com

(END) Dow Jones Newswires

June 26, 2020 23:10 ET (03:10 GMT)

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