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Delta, Pilots Strike Deal to Save Jobs

Delta Air Lines Inc. DAL 0.07% pilots agreed to accept reduced pay in exchange for job security until 2022, as the industry continues to grapple with reduced travel demand due to the coronavirus pandemic.

Delta and the union that represents its pilots said Wednesday that the cost-cutting agreement would prevent the more than 1,700 pilot furloughs the carrier had originally planned. Under the agreement, pilots who would have been furloughed will receive pay for 30 hours a month, though they won’t have to fly. Delta would also be able to reduce pilots’ minimum guaranteed work hours by as much as 5%, which results in lower pay, and the company agreed not to carry out furloughs until Jan. 1, 2022.

“Pilots, as long-term stakeholders in our company, have stepped up to the plate once again to help Delta weather this crisis,” said First Officer Chris Riggins, a spokesman for the union that represents Delta’s pilots.

Airlines have had to shrink to match a diminished outlook for travel demand. The global airline industry is forecast to lose $38.7 billion next year even if Covid-19 vaccines and testing help reopen more borders, the International Air Transport Association said earlier this week.

Airlines were barred from furloughing employees until October under the terms of federal aid they received at the start of the pandemic. They were hoping to receive another round of funds to prevent job cuts until next spring, but stimulus discussions in Congresshave been stalled for months.

By the end of the year, U.S. carriers will have cut about 90,000 workers through furloughs and voluntary departures, according to lobbying group Airlines for America, bringing the industry’s employment to its lowest level since the mid-1980s.

American furloughed 1,600 pilots. Southwest Airlines Co. hasn’t yet cut any workers but has said it would begin furloughing next year unless it can reach deals with labor unions to cut costs.

Delta said it has been able to avoid cutting front-line workers such as flight attendants, mechanics and now pilots, in part because some 18,000 employees agreed to take buyout or early retirement offers, and thousands more took unpaid leaves. Delta also has cut hours for many employees by 25% to save money. In all, Delta has said it is about 20% smaller than it was before the pandemic.

Airlines and unions have worked to avoid cutting from their pilot ranks to avoid costly and time-consuming retraining when demand recovers.

John Laughter, senior vice president and chief of operations at Delta, said in a message to employees that the deal will better position the airline to bounce back.

“Our recovery will be uneven—as evident by the recent increase in Covid rates which are affecting our bookings for the holiday season,” he wrote.

This article originally appeared on WSJ

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