Delta’s Alternate Reality: CEO Claims Airline Did Not Receive Bailout

Delta Air Lines’ CEO Ed Bastian argued with a straight face that Delta did not receive a taxpayer bailout during the pandemic. Does his claim have any merit?

CEO Ed Bastian Claims Delta Air Lines Did Not Actually Receive a Bailout

Earlier today I outlined Delta’s strong financial outlook for 2022 and how the Atlanta-based carrier recently recorded record demand for a calendar month. Bastian has made his rounds in the media to discuss Delta’s return to profit and made a frankly outlandish claim on CNBC’s Squawk Box concerning taxpayer bailouts during the pandemic.

“While it has been, two years ago, classified as a bailout, candidly it wasn’t a bailout. The money that was provided to the airlines were there to hold employees in place for the period of time it took for the vaccines to show up,” says $DAL CEO Ed Bastian on covid bailouts. pic.twitter.com/LEM7hKJ7dT

— Squawk Box (@SquawkCNBC) April 13, 2022

Bastian was asked about whether he felt any duty to U.S. taxpayers over Delta shareholders due to the bailout and responded:

“While it had been, two years ago, classified as a bailout, candidly it wasn’t a bailout. The money that was provided to the airlines were there to hold employees in place for the period of time it took for the vaccines to show up and people to start traveling again.

“The airlines actually did not receive any significant amount of windfall back through the taxpayers, though we greatly appreciate the support. Because had we not received that support, we would have been forced to lay off tens and tens of thousands of people, and we’d be in a position today not having the air service that this country needs.”

My response:

Talk about a narrow definition of what constitutes a bailout!

One Mile At A Time helpfully points out a figure that strongly undermines Bastian’s logic.

• February 2020 – Delta had 91,416 employees
• February 2021 – Delta had 62,588 employees

Sure, Delta may not have been allowed to furlough employees after accepting Payroll Support Program (PSP) support, but money was used to offer employees early retirement packages as a way to permanently reduce labor costs.

Buying off senior flight attendants and pilots marked a great way to reduce labor obligations while not running afoul of bailout guidelines.

The result? Meltdown after meltdown during the pandemic due to insufficient staffing, even through the bailout (even by Bastian’s own words) was meant “to hold employees in place” in order to effectuate a rapid recovery when the pandemic receded.

CONCLUSION

Sorry, but Bastian’s logic is absurd. To make that argument with a straight face is an insult to U.S. taxpayers.