Delta CEO Takes Paycut Amidst Massive Cutbacks

It was a frustrating day for Delta Air Lines, as it has been for all travel industry-related businesses of late due to the impact of the coronavirus.

On the same day CEO Ed Bastian said he would forgo his entire paycheck for the next six months, the carrier’s leader said Friday he would be making unprecedented capacity cuts while at the same time asking employees to consider taking voluntary unpaid leaves.

In a memo to Delta’s 90,000 employees obtained by CNN, Bastian wrote that “The speed of the demand fall-off is unlike anything we’ve seen—and we’ve seen a lot in our business.” Delta will make an “overall capacity reduction in the next few months of 40 percent—the largest capacity reduction in Delta’s history, including 2001. The situation is fluid and likely to be getting worse.”

Delta will park 300 of its planes and Bastian asked employees to “see what you can do to help us save cash,” including unpaid voluntary leaves.

“Cancellations are rising dramatically with net bookings now negative for travel over the next four weeks. To put that in perspective, we’re currently seeing more cancellations than new bookings over the next month,” Bastian wrote.

Including cutting capacity while it deals with President Trump’s ban on airline travel from 26 European countries over the next 30 days, Delta will defer new aircraft deliveries, cut capital expenditure by $2 billion and freeze all recruitment.

Saying Delta “remains better-positioned to weather a storm of this magnitude than ever before in our history,” Bastian added that “I know many of the newer members of the Delta family have never experienced this level of uncertainty in our business. Your veteran colleagues will tell you that we have been through turbulent times before, and what has always carried us through has been our commitment to our values, our culture and each other. I am confident that we will emerge from this crisis as a strong, trusted global brand that truly connects the world like no other. And we will be stronger for having gone through this experience.”