Rich Uncle Pennybags Bastian has warned of “furloughs in the tens of thousands” without more help from the federal government for the U.S. airline industry. Joining the Kirby Khorus, Bastian is firmly behind another taxpayer-funded bailout for Delta and other U.S. airlines, insisting it is necessary to avoid catastrophic job losses.
Delta CEO: Catastrophic Job Losses Without Another Bailout
In early July, I warned that Delta CEO Bastian was hinting strongly at a second bailout for Delta and U.S. airlines. Sure enough, Bastian is now publicly and firmly in support of another payroll support package.
Speaking on Fox News, Bastian warned:
“If we do not get the support that we need, I know within the industry there will be furloughs and probably some pretty large numbers of furloughs in the tens of thousands of employees.”
Ooohhhh…tens of thousands of job losses right before an election?! Give Bastian credit for knowing how to work the system.
Of course Bastian is hopeful that employees will quit anyway:
“If we can keep using good voluntary measures to get through this, we can mitigate furloughs but its probably hard to say for sure that we’ll be able to do that completely.”
Isn’t this one reason precisely why an additional bailout of $25 billion is not needed? 20% of the Delta workforce already quit last week…pay has already been slashed for thousands of others through reduced hours.
Like Sara Nelson did last week, Bastian invokes the “essential” language and also adds the “too big too fail” argument.
“There’s been a lot of support, all the way up through the president, to considering extending the relief for the airlines to get through the next six months in turn for agreeing to continue to keep those workers in place because we know airlines are going to be essential to the recovery of our economy. Our country is too large, we’re connected through transportation systems given our scale in size in how we operate, particularly our businesses, and keeping the employees in place will allow us to keep businesses in place that will get them moving as soon as they’re ready.”
Per Bastian, “our country” (USA) is too large for Delta to fail.
Bastian: It’s All About Making Passengers Feel Safe
Delta continues to block middle seats and Bastian credits that as key in restoring consumer confidence:
“Our top priority as we’ve gone through the pandemic is to restore confidence in consumer travel and their travel behaviors and we believe distance on board the plane, having that middle seat open, having that seat next to you vacant is an important factor in not just the comfort of the flight but also the safety of the flight. We want consumers to feel as confident as they do already with us in their flight safety as compared to their personal safety.”
He also correctly notes that Delta must do more than provide lip service: it must actually deliver cleaning protocols that work:
“There’s certainly, the first time back, there is some apprehension as people get back into the environment. But more and more people as they take that second, third and fourth trip, they’re telling us that we’re doing a great job. And it’s a discerning customer, it’s someone that they’re watching to make certain that we’re implementing all the protocols that we tell the people we’re doing and our team is doing a great job of that.”
Bastian is still hoping demand will come roaring back once a vaccine is in place:
“When that vaccine is in place, and there will be a series of vaccines hopefully over the course of the next 6 to 12 months, we’re going to see travel come back at a meaningful level. I think it’s going to take two to three years to get consumer behaviors back, but we do know there is a tremendous amount of pent up demand for transportation, for travel, for mobility and we’re ready to serve customers when they’re ready to go.”
CONCLUSION
I hate the scaremongering when Delta and other airlines can easily raise billions of dollars in private equity in short order. But Bastian has joined the doomsday choir, arguing strongly for another taxpayer bailout to do what Delta investors would never do themselves.
image: Delta
Yep. British Airways recently announced it’s raising 2.3 billion pounds by issuing new shares. That’s the way it’s supposed to work in capitalist countries.
@ Matthrw — Where are the REAL Republicans? Oh, right, they’ve all been replaced by Trumpites. I certainly hope the 20+Senators with some fiscal sense can block ALL further bailouts. I am tired of being robbed.
Since we are speaking for the other side…where are the real Democrats? The tolerant ones, open minded, peaceful. Now you’re all a bunch of violent, rioting Bolsheviks that demand complete compliance with the furthest left view possible or your life will be destroyed. Fascist communists basically(and anarchists…strange alliance there). I’ll take Trump’s many faults over where the left is heading.
All these big spending billls don’t go anywhere without Dem support. No blame there? Without republicans, the spending bills would be 5x as big. The problem is not real republicans, it’s the moderate RINOs, and also in an election year crisis most idiot voters want congress to do “something”, even though spending huge amounts of money is usually counterproductive.
If a party were to subscribe to fascism, communism, and anarchism wouldn’t they just net out to being centrist?
Funny (and quite ignorant) how it’s the Democrats who you are blaming for budget expansion…pretty sure it got to balanced under Clinton and reduced for Obama once he cleaned up after Bush 43.
Oh, the Dem ticket is pretty center-left, if you haven’t noticed…try turning off Faux News for a change.
Are you really surprised? This is his job as CEO of Delta, and the govt has shown a willingness to help before.
I don’t blame him at all. I still don’t like it.
Wow what a spiteful article. If there is no further bailouts, I’m sure Delta will be happy with that. Delta is in a really strong position now and may not have any furloughs. Yes, 20% of the employees have taken early retirement or voluntary separations, and more than half have taken Voluntary Leaves of Absence (they don’t get paid, but keep all the benefits.)
Maybe you should look at how hard Ed Bastian and the rest of Delta fight for the entire US aviation industry. This is not just about Delta. United and American have already publicly announced there will be 30,000 furloughs from each company. What position are other US based airlines in?
Yes, Delta is catering to the consumer in regards to aircraft loading. Their customers want to be separated, instead of being sardined into one of the few flights offered by the other carriers. Customers want to know that the company to whom they are entrusting their lives has their best interest at heart.
“Rich Uncle Pennybags Bastian”? Ha! The man is CEO of one of the largest companies in the US right now, yes; but you have no idea who is Ed Bastian. Maybe do some more research? Make it unbiased this time?
Delta can BORROW money, as can lots of others being handed OUR tax money. Why does everyone suddenly think they are entitled to steal from their neighbors? I was/am a bleeding liberal, but I swear if it were not for the Supreme Court, I would start voting for the most FISCALLY conservative Republicans I could find. Getting rid of Trump as POTUS is more important — for now.
DELTA IS NOT IN HOOD SHAPE!
BAD INVESTMENTS!
49% Stake in Virgin America-bankrupt!
Invested in Latam. Bankrupt!
Invested in oil refinery! Oil all time low.
Refinery losing money!
A hub at JFK. NO BUSINESS IN NY.
OLD, OUTDATED PLANES!
OK, then they should file bankrputcy.
@Harry J: See my comments below. You misunderstand totally my position. I don’t fault Bastian one inch. That doesn’t mean I have to go along with his approach.
Great journalism, not pushing your perspective at all. Way to just report the facts and not lead consumers to draw their own opinion.
So he wants public money to fly empty planes?
Airlines are essential but not every flight, every employee, every aircraft, every station, every pay level is essential.
This is precisely the point. Delta has already cut 20% of its workforce. It doesn’t need more charity.
Hey gene, Trump’s not going anywhere, so deal with it!
I guess he will cheat to win, AGAIN.
Well said Harry! Some people, the called “experts” love to talk, without considerations. Delta people has being doing a big sacrifice, including their CEO, trying to mantain alive a company that serves our country and trying to keep everyone with a job.
You’re right: he doesn’t have idea who’s Ed Bastian….hopefullyMr Klint will make some research before write an article!
@ Harry. You say the workers on voluntary leave , basically a euphemism for being laid off, keep benefits. In all the cases I’ve seen, health benefits last 2 months on VTO. 2 months. (Who cares about the flight benefits at this point) Those 2 mounts go by quickly. Then what? It’s essentially being laid off, although they want you to feel like you had a choice in the matter.
Other posters: As to Delta being able to easily raise private funds, where is the proof? Do you have any inside information, or is it just conjecture?
@Captain Joe. Employees take a voluntary leave WITH a return date…. also return to the exact position you left. Many have already returned from their 3-4 month leaves.
Good. The job functions are not needed by society, not for a few years at least. Oh tens of thousands? What about the 30M+ in other industries that lost their jobs? Communism is a system of guaranteed employment. It failed miserably. Best to redeploy those resources based market demand. That can’t happen if people are paid by other taxpayers to do nothing.
his job is to secure the future of his company and his employees; if that comes in the form of vague apocalyptic statements, that is nothing that has not been done before. If he has to lay people off, he’d rather blame dysfunctional congress than dysfunctional C suite. He is 1,000,000 in line to sip from the public trough.
I thank you, Harry J, for your thoughtful analysis of the current state of the airline industry.
I also thank you for exposing the mean-spirited and knee-jerk reaction by this all-knowing travel blogger. Ooh, now there’s an essential job. What money-bagged backer is paying your way to allow you to spew out these ramblings, Matthew?
I believe experienced and proven airline professionals have a far better understanding of the industry than an elitist outsider with a travel blog and a credit card.
What is disappointing and concerning are the number of people who take the reactionary opinions of travel bloggers as the ultimate truth. It’s the internet, folks, and the facts are slim.
And by the way, I am a retired airline professional with 27 years in the industry.
You want to rant against companies run by ruthless CEO’s, Matthew? Try Emirates or Facebook. Clark has done substantial damage to the environment (114 A380s). And Zuckerberg has appointed himself the czar of personal privacy. Bastian is not the enemy.
See my comment below JB.
Wow. I listened to the interview live yesterday. You’re completely taking his comments out of context; he was in NO WAY fear-mongering or “joining the doomsday choir.”
I encourage those who haven’t already to go watch or listen to the interview yourself.
Actually, I think this is brilliant. Each of the airlines are using the threat of job losses to get funding from the Federal Government instead of going to the private markets for it. It seems that the Feds are far easier to negotiate with than Banks, so this is actually a shrewd and predictable move. He is playing the cards that he has access to and so far, many Senators are on board – a bipartisan group by the way. Tip of the cap – he is doing his job and if it doesn’t work, he will regroup and use the 15bn in liquidity that they already have. You may not like it, but it is one of the advantages of being Delta’s size.
It’s certainly brilliant and I don’t fault him…I really don’t. People think I don’t respect Bastian. I have GREAT respect for him. I also think he’s probably a decent guy. But he’s such a politician and his words and pressure are exactly why Americans hate politicians.
Why is this government wanting to give them ANOTHER bail-out to the tune of billions of dollars ??? Slice it, dice it and build it back up again…. what is so hard to comprehend? Why are airline employees going to get paid for doing what ???, …. standing around looking at one another? DL, UA, AA…. you have 70% of your flights, airplanes not operating and you’re wanting to pay 100 percent of your employees? Wow, must be nice to go to a job, stand there and do 10% of the work and get paid for 40 hours. If one is really clever, they’ll find a way to slide and do nothing. The trouble with having nothing to do is you never know when you’re done. Totally ridiculous for DL or anyone else to expect a second bailout in less than one year.
How about landlords who are not getting paid their rent by tenants ?- what do they come up with to pay property taxes, insurance, their loans, utilities, etc ?? Those are the people that should be getting bail-outs by way of the government determining how much rent they collect on a given property and pay them directly.
Can Delta sale it’s oil refinery company or shares of the private plane company they own? Or are they asking for bailout money there too? Delta already outsources many jobs and also has part ownership in those companies. Make it work Delta on your own dime, that’s what being a business owner is all about.
Gene you start your article with a sarcastic tone and have 50% of the facts correct. Are you a journalist or a commentator. Unfortunately with your skill set neither.
Bastion has forgone pay during the pandemic, and all other compensation is dependent on the companies profitability. So he wont be expecting any bonuses or stock options this year.
Further, Mr. Bastions salary is on the low end of other airline CEOs, so I wouldn’t exactly call him Uncle Moneybags.