More Delta Cuts: Slashed Pay, Closed Sky Clubs, 600 Aircraft Parked In Response To COVID-19

Atlanta-based Delta Air Lines Inc. is making more major cuts to its operations in response to fallout from the global coronavirus pandemic.

In a memo to employees, which was filed with the Securities and Exchange Commission Wednesday, chief executive officer Ed Bastian said Delta will reduce capacity by 70% systemwide “until demand starts to recover.” Delta expects March revenue to decline by almost $2 billion year over year, and it projects April revenue to fall further.

Delta is looking to secure more than $4 billion in cash savings in the June quarter. Beyond the reduction in capacity, Bastian laid out the following measures going forward:

• All Delta officers will take a 50% pay cut through June 30. Directors and managing directors will take a 25% cut during that same period.
• In addition to chief executive officer Ed Bastian forgoing 100% of his salary through the next six months, each member of Delta’s board of directors has elected to forego their compensation over the next six months as well.
• Delta is taking initiatives to occupy less space in airports due to plummeting demand. The airline will temporarily consolidate airport facilities at Hartsfield-Jackson in Atlanta and other locations as necessary, and it will close “the majority” of its Delta Sky Clubs until demand recovers.
• The airline is parking at least half of our fleet, more than 600 aircraft. It will accelerate retirements of older aircraft such as MD-88/90s and some 767s.
• Delta is reducing any maintenance spending “that is not necessary to support the safety of our operation.”
• The airline has reduced most contractor spending, “except where needed to support the operation.”