Delta Warns Pilots of Potential Layoffs as the Pandemic Continues
Earlier this year, the CARES Act helped avert a tidal wave of layoffs and furloughs in the U.S. airline industry. In return for a total of $25 billion in grants to major passenger airlines (roughly 30% of which must be paid back), airlines had to agree not to implement any involuntary layoffs or furloughs before Oct. 1.
That date is just a few months away now. With the COVID-19 pandemic still in full swing and demand expected to recover slowly, airlines have had to start preparing for workforce reductions in the fall and beyond. For Delta Air Lines (NYSE: DAL), that could entail furloughing more than 2,500 pilots.
Without government intervention, most U.S. airlines would have needed to furlough the vast majority of their workers a few months ago, as demand plunged to just 4% of 2019 levels by mid-April. Yet many employees would have been called back within months to match returning demand. Part of the rationale for the CARES Act's payroll support program was to avoid short-term furloughs like this by giving airlines funding to get through the trough period.
Source Fool.com
