United was first out to employees with its plan to shed staff as soon as CARES Act restrictions lift. After I broke details of how American Airlines would do this last night the airline pushed forward its communication to management and support staff.
American had planned to notify non-union workers today of their options to leave voluntarily, along with what an involuntary separation would look like as they push to shed at least 30% of these staff.
Delta also shared their offer today as well. Here’s what the Atlanta-based carrier offered to employees, and how they pitched it. First, a memo from CEO Ed Bastian, explaining their need to also cut about 30% of staff.
Employees with more than 25 years at Delta are being offered a retirement package, while most employees are being offered a voluntary ‘early out’ that should be more attractive than being let go when CARES Act restrictions lift. (Pilots are unionized and so there’s more to work through there, an offer should be made to them next week.)
To: Delta Colleagues Worldwide
From: Ed Bastian, CEO
Subject: Protecting Our Jobs and Our Future
The summer travel season has officially begun, and it will be a season like none other in Delta’s history. While we’ve seen some small but welcome increases in our passenger volume, our expectation that the pandemic will have a meaningful effect on air travel and our business has only deepened. It will likely be two to three years before we see demand recovery on a large scale.
During that time, Delta will have to be a smaller airline as we adjust to reduced demand and the need for distancing and safety during travel. A smaller Delta unfortunately means fewer people will be required. The payroll protection we received under the CARES Act allowed us to commit to no involuntary furloughs through the end of September. As I mentioned in my memo last week, furloughs are a last resort, and it is our top priority to avoid them if at all possible.
Tomorrow morning, we will be announcing the details of two voluntary programs that provide the options many Delta people have asked for, while also allowing us to become a temporarily smaller airline and protect jobs. One is an enhanced retirement package for long-term employees who are nearing retirement age or have more than 25 years of service. The other is a voluntary opt-out package that covers most of Delta’s eligible employees.
We are in discussions with the pilots’ elected representatives regarding a similar early retirement plan for our pilots, and expect to offer the plan details over the next week.
Both programs have generous benefits that you told us are most important, including cash severance, fully paid healthcare coverage, and enhanced travel benefits that include positive space passes. The details of each package will be available on Deltanet, and you’ll be receiving emails as well with more information. The election window opens June 10, with most retirements on Aug. 1.
I urge everyone to read the information and consider whether a voluntary departure from Delta makes sense for you and your family. While we never dreamed just a few months ago that we would be talking about a smaller Delta – this was expected to be a year of growth, after all – this is the reality we’re facing. Every voluntary departure helps to protect the jobs of those who most need them.
I can’t emphasize enough how challenging the environment is, and will be for the foreseeable future. Earlier this week, our partner LATAM became the latest airline to file for bankruptcy. While it was disappointing to see, none of the Latin American countries LATAM operates in was prepared to provide them government financial support to this point – which necessitated the decision to file. We have the utmost confidence in the LATAM team, and remain firmly committed to our partnership, which will be important when we rebuild our international network in the recovery.
When I’m out traveling, or taking your questions during our virtual Town Halls, I’m often asked for specifics about how small Delta will need to be over the next couple of years. The fact is, right now we simply don’t know. We’re working to expand job functions and have been bringing in work that had previously been performed by vendors, but ultimately, we will have a work force commensurate with the demand for flying. The only thing we can be sure of today is that the more people choose to depart voluntarily, the greater our chances for avoiding furloughs this fall.
I continue to be inspired and heartened by the incredible number of you who raised your hand and volunteered to take short-term unpaid leaves. More than 40,000 have sacrificed to help Delta navigate the early months of the crisis, and the entire Delta family owes you a debt of gratitude.
Even in the age of social distancing, the human connection that Delta people provide to our customers is making a huge difference. Just consider this short but appreciative feedback we received from one customer recently:
“Delta is innately in tune with the customers’ need and desire for safe and comfortable travel. Extreme care and consideration emotes through both pilot and flight attendant announcements. Flying Delta is a wonderful experience.”
I am prouder than ever before to be part of the Delta family. Thank you for your passion, your professionalism and your dedication. I’ll be in touch soon with another update.
Here are details of the offers, along with a Q&A, from Delta HR:
5 things to know about the 2020 Delta Voluntary Departure Programs
Published Date 5/28/2020 8:05 AM
By HR Communications staff
Two new voluntary programs were announced today: the Enhanced Retirement Program and the Voluntary Opt-Out Program. These programs were designed with Delta people in mind, providing benefits you’ve asked for and enhancements to better support you as you consider your next chapter.
Here are five things to know about these voluntary programs:
1. Employees electing to participate in either program receive a cash severance payment.
Transitioning from Delta to the next chapter in your life is a significant step and we understand that finances play a big role in your decision. For employees who elect to participate in either program, Delta will offer a generous lump sum cash severance payment. The amount you receive is based on your completed years of consecutive service as of Dec. 31, 2020, and weekly pay rate as of April 1, 2020. Visit Self-Service to see your personalized statement.
2. Both programs offer continued healthcare support.
For both programs Delta will pay medical, dental and vision premiums for a period of time for employees eligible for Delta healthcare coverage – up to 12 months for the Voluntary Opt-Out Program and up to 24 months for the Enhanced Retirement Program. In addition, Enhanced Retirement Program participants will receive a Retiree Medical Account of at least $100,000 that can be used to reimburse eligible healthcare expenses in retirement. These RMA values can be used to cover continued Delta coverage (COBRA or retiree medical), Medicare premiums or out-of-pocket costs.
3. Both programs offer eligible employees active pass travel for one year after separation.
The 2020 Delta Voluntary Departure Programs provide active travel priority for one (1) full year after separation, including S2s. Once that year is over, those who elect the Enhanced Retirement Program, as well as Voluntary Opt-Out Program participants with at least 10 consecutive years of service and combined age and service equaling 55 points as of Dec. 31, 2020, will qualify for standard retiree pass travel privileges, including the new annual allotment of six (6) S3A flight days per PPR member per year – Delta’s enhanced retiree travel standby priority. Other Voluntary Opt-Out participants will have a maximum of 10 years of continued S3B Yield Fare travel.
4. Employees electing to participate in either program receive positive space passes.
Those electing to participate in the Enhanced Retirement Program receive eight (8) positive space passes in total to be shared among their PPR members. Participants in the Voluntary Opt-Out program will receive two (2) Delta Departure positive space passes. These passes are round trip and have no expiration date. You can use them to fly anywhere Delta flies. Like Delta Spirit Passes and Delta Difference Passes, these passes are available for upgrades on a standby basis.
5. Most U.S. based Delta employees are eligible.
Ground, flight attendant and merit employees on active payroll status at least one day from Nov. 27, 2019, to June 9, 2020, are eligible for one of the two programs. Employees eligible for the Enhanced Retirement program must meet the following requirements:
· Employees eligible to retire (52 or older with 10 or more years of service)
· Or 25 years of service regardless of age or with at least 10 years of consecutive service and age + years of consecutive service totaling 70 or more “points”
You’ll have a variety of tools to help evaluate the right decision for you and your family, including the Alex tool, available in June, to help walk you through program details and considerations. Employees considering retirement can also connect with a Fidelity representative for one-on-one discussions. These representatives are educated and trained on the details of the programs to help you better evaluate the decision that’s right for you.
If you are eligible for Medicare (age 65), or are about to be, take advantage of the UnitedHealthcare Medicare Concierge. These UHC plan advisors are knowledgeable of the Enhanced Retirement Program details and can help explain your options, how Medicare works and more.
Additionally, the 2020 Delta Voluntary Departure Programs Resource Hub provides quick access to program details, FAQs and access to submit a question via the new Ask HR tool. Eligible employees can also join the conversation and participate in weekly town halls and learning sessions in our dedicated 2020 Delta Voluntary Departure Programs group on SkyHub.
And don’t forget, you can review your personalized eligibility statement in Self-Service. Full program details will also be mailed to eligible employees before election window opens on June 10.
It’s sad that it’s come to this. Delta’s projections for a smaller workforce are in line with those of United and American. In the end I wouldn’t be surprised to see more employees let go by one or more of those airlines beyond what’s been outlined so far.