Delta Airlines announced Wednesday it seeks to slash its flights by an unprecedented 70 percent after March's revenue plunged approximately $2 billion as the coronavirus ravaged demand.
Delta Chief Executive Officer Ed Bastian said in a memo to workers that the business will continue to take "all appropriate self-help steps," with cash preservation the highest priority, even as it appears hopeful of the White House and House of Representatives' support.
Bastian reported that the airline is resting at least 50 percent of its fleet as revenue for flights has plunged both in the U.S. and globally in the ongoing pandemic.
The Atlanta-based company's stock price plummeted 26 percent Wednesday, ending at $23.49, and has fallen over 50 percent since mid-February as more nations shut borders and prospective travelers stop leaving their homes because of the global health crisis.
Since Friday, more than 10,000 personnel have offered to take unpaid leave - and Delta Airlines encourages more staff to join them while mothballing over 600 aircraft and eliminating 80 percent of international flights in the next two to three months. The domestic flights will also be restricted significantly.
U.S. airline stocks plummeted to new multi-year lows Wednesday as airlines further reduce costs and are asking for billions in government assistance.
According to a document reviewed by Reuters, the Trump administration on Wednesday proposed $50 billion in loans for U.S. airlines with conditions including limitations on executive pay raises before the loans are repaid.
All Delta Airlines senior personnel will take a 50 percent salary cut by June 30, and a 25 per cent pay cut will be taken by managers and managing directors. Executives would forgo six months' salary, part of a June Quarter initiative to save $4 billion.
Bastian pointed out in a memo that making decisive steps now to reduce the losses and conserve cash would "provide us with the tools to come back from the other side and secure the future of the airline."
American, Global, JetBlue, Southwest and others, including Delta, are cutting their flights, calling on staff to take unpaid leave, freeze recruiting and park hundreds of aircraft, a move that weighs heavily on aircraft manufacturers such as Boeing and Airbus.
American, for example, said it was giving staff up to a year of unpaid leave. Employees can also leave the company entirely and buy health benefits at the same premium as employees if they have been working for the airline for 15 years or more.
