Delta will retire all of its iconic Boeing 777 jets at the end of the year as the COIVD-19 outbreak continues to cripple the company.
The retirement will accelerate the airline’s strategy to simplify and modernize its fleet, while continuing to operate newer, more cost-efficient aircraft,” Delta CEO Ed Bastian said. The new aircraft are more fuel efficient than their predecessors, burning 21 percent less fuel according to the company.
The move comes after the company announced the retirement of its MD-88 and MD-90 fleets by June amidst its cost-cutting efforts.
End of an Era
“The 777 has played an important role with Delta since 1999, allowing us to open new long-haul markets and grow our international network as we transformed into a global airline. However, parking this fleet will provide significant cost savings over the next several years.”
With both domestic and international travel all but halted due to the Coronavirus; airlines have not been immune to the negative economic impact.
Delta has responded not only by retiring planes, but furloughing employees and grounding flights as well. After informing the company of its decision to retire the 777 fleet; it also informed employees the airline will have nearly two times as many pilots as it will need for the coming year.
“I recognize that is an alarming number so it’s important to know that our intent is to align staffing for what we need over the long term,” said senior Vice President of flight operations John Laughter.
Delta is also one beneficiary of a billion-dollar government bailout; along with fellows America Airlines Group Inc and United Airlines Holdings. The payment prevents any job at the corporations before October; but Delta would still have 2,500-3,500 more pilots than it needs by fall 2021.
We’re making strategic, cost-effective changes to our fleet to respond to the impact of the COVID-19 pandemic while also ensuring Delta is well-positioned for the recovery on the backside of the crisis,” Gil West; the company’s chief operating officer, said in a statement announcing the 777 phaseout.
The combination of moves by Delta is expected to save the company about $550 million per month; but it is still reportedly losing $50 million per day.
So far this year Delta stock has fallen 68 percent, while Boeing shares have dropped at a 64 percent clip.