Delta Air Lines (DAL) CEO Ed Bastian tells Yahoo Finance Live that containing the coronavirus is more important than additional federal aid for the airline industry.
“I would encourage our government to do everything within their power to commit whatever resources they have to containing the virus as the most important thing we need to get our business back,” Bastian said.
Delta lost more than $15 billion in 2020 as the coronavirus pandemic decimated travel worldwide. But the airline managed through the crisis without any layoffs and lowered its average daily cash burn from $100 million to $12 million.
Bastian remains optimistic that Delta will be “cash breakeven” in the second quarter if the national vaccine rollout accelerates.
“By the time we get to the Spring, March, April, May, into June, I think you're going to find the vaccination starting to build some real critical mass,” he said.
But Bastian’s peers at other airlines are worried and considering asking Congress for additional financial aid.
American Airlines (AAL) CEO Doug Parker just told his employees to prepare for more furloughs when the second round of federal aid expires in March. “I hate that we’re in that position but we are and we can’t ignore it so we have to start figuring out what to do about it,” Parker said.
United Airlines (UAL) CEO Scott Kirby is preparing his employees for a round of layoffs that could number as high as 14,000.
Southwest (LUV) CEO Gary Kelly told Yahoo Finance the airline is still temporarily overstaffed although it has avoided layoffs, with none planned in the future, and expects demand to pick up in the second quarter. “If we downsize the airline, it will make it harder for us to respond when the demand comes back,” Kelly said.
Bastian said controlling the virus is necessary to avoid layoffs. “We need confidence back, we need people feeling safe in travel. And it's going to build, I do think this spring is when we're going to see the bookings start to build in anticipation,” he predicted.
Safe travels
Delta still blocks 30% of the available seats, often the middle seat, on its flights. Bastian said no decision has been made about ending or extending the policy, which is in place through March.
The Biden administration, however, is considering mandatory COVID-19 testing for all passengers on U.S. domestic flights. Dr. Marty Cetron, director of the CDC Division of Global Migration and Quarantine ,recently confirmed, “We're actively looking at it."
Bastian said it’s unnecessary. “We're carrying millions of people as an industry domestically, already safely,” he said.
He worries a mandatory testing program would significantly harm the industry’s recovery. “I certainly think we should have a do no harm policy, and ensure that we at least keep the revenue streams we've got coming in,” Bastian said.
Delta becomes more diverse
Last month on Martin Luther King Day, Bastian updated Delta’s 75,000 employees on what he calls “the global reckoning over racial inequity and injustice.”
The airline has an ambitious program to enhance hiring practices to reduce bias in job descriptions and qualifications. Delta also monitors diversity among job candidates and final hires. Delta has committed to doubling the percentage of Black officers and directors who lead the company as well as grow the number of other minority and female officers in those ranks.
“We currently have about 7% of our officers, the top 100 people in the company who are Black. That's not good enough when I expect to double that over the next three to five years, in terms of, on percentage terms,” Bastian said.
Bastian became Delta’s CEO in 2016 and said leading his team through social change and the pandemic reminds him “that crises don't build character, crises reveal character.”
Despite the difficult year, Glassdoor recognized Delta as one of its “Best Places to Work” 2021 and ranked it No. 7 on a list of 100 large companies. It reinforces Bastian’s conviction that, “The decisions I take are going to be a reflection on the character and the values of Delta.”
Adam Shapiro is co-anchor of Yahoo Finance Live 3pm to 5pm. Follow him on Twitter @Ajshaps
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