April 15, 2021

Latest news and Update

Latest news and Update

Delta hands out bonuses to managers whose pay was cut in the pandemic

Delta Air Lines Bombardier Boeing 757-200 aircraft as seen arriving, on final approach for landing in New York JFK John F. Kennedy International Airport.

Nicolas Economou | NurPhoto | Getty Images

Delta Air Lines, which received billions of dollars in federal aid last year, is paying managers bonuses ranging from a few thousand dollars to more than $100,000 to make up for pay cuts at the start of the pandemic last year.

Frontline workers like flight attendants, pilots and others in non-managerial positions are not receiving bonuses.

Last year, Delta cut managers’ pay and also reduced thousands of workers’ hours by 25% to help weather the pandemic’s plunge in travel demand, a policy that was criticized by some lawmakers. The Atlanta-based airline avoided involuntary furloughs or job cuts, partially thanks to the 18,000 employees, roughly 20% of Delta’s pre-pandemic workforce, that accepted buyouts and early retirement packages last year. The carrier posted a record loss of $12.4 billion in 2020.

“While all Delta people were affected by the worst year in our history, following a comprehensive pay review of all levels in our organization below the executive officer level, we identified levels that were disproportionately impacted as a result of last year’s events and made a one-time adjustment payment,” Delta said in a statement.

Delta received $5.6 billion in federal aid last year as part of a $25 billion program passed as part of in the CARES Act in March that prohibited airlines from cutting employees.  The carrier expects to receive $2.9 billion this quarter as part of an extension of that program that Congress passed late last year, Delta said in a filing last month.

The pilots’ union criticized the move, which was first reported Sunday by the View from the Wing travel blog, saying it went against the spirit of the CARES Act, federal payroll support that airlines received last year in exchange for not involuntarily cutting worker.

“While we are confident that Delta will recover quickly once the country comes through the pandemic, the payment of special bonuses to management while the airline is still burning cash is premature and inappropriate,” said Chris Riggins, spokesman for the Air Line Pilots Association, in a statement. “We also believe the payment of bonuses limited to management is inconsistent with the spirit of the CARES Act. This was an unfortunate and shortsighted decision.” 

Delta says it is following the CARES Act terms, which placed limits on top executive compensation. Managers’ compensation can vary depending on company performance. Delta says it continued to pay rewards to frontline and other employees for hitting operational targets but those amounts are lower than the bonuses.

The carrier and its U.S. competitors are on track to receive additional federal payroll aid.

On Friday, the House passed a $1.9 billion coronavirus relief package that includes a third round of federal payroll support for airlines. If the bill passes the Senate, U.S. airlines would get $14 billion in exchange for keeping workers paid until Sept. 30. U.S. airlines have already received $40 billion in payroll support in two other coronavirus aid packages.