Three Of The Large Airlines Gave Nearly $6 Billion Back To Shareholders Just In The Last Year
Washington D.C. – As most Americans worry the Trump administration is doing too little to address the multiplying health and economic consequences of the coronavirus pandemic, the White House is staying the course in prioritizing bailout requests from multi-billion dollar industries like the luxury cruise and airline industries.
On Monday, President Trump declared “We’ve told the airlines we are going to be helping them” as the industry is now asking for a nearly $60 billion, no-strings-attached bailout. Among the companies with hat in hand is Delta Airlines, that just six days ago paid out a $257 million dividend to shareholders – a decision made after acknowledging the risk a contagious outbreak posed to its business for years, and well after the coronavirus outbreak had begun affecting the company’s operations. This is par for the course for America’s major airlines though – in the last year alone they’ve returned nearly $6 billion to shareholders, after spending 96% of free cash flow on stock buybacks over the last decade.
“Coronavirus tests are still in short supply and there’s no plan in motion for comprehensive paid sick leave. But if there’s one thing the Trump White House is on top of it’s a bailout for the big airlines – including at least one company that had enough cash to pay a quarter billion dollar dividend to shareholders just days ago, long after the coronavirus threat was widely recognized,” said Derek Martin, director of Allied Progress. “Billion dollar corporations know the risks of an economic downturn, sometimes with a startling level of specificity. It’s easy to make your stock price the top priority when you expect a golden parachute from taxpayers if things go south. President Trump and his Senate backers must focus on creating a baseline of health, food and economic security for vulnerable workers and their families least equipped to deal with this crisis. The corporate executives that brought us $200 change fees should take a number.”
WHAT YOU NEED TO KNOW:
Delta Air Lines Declared A $257 Million Dividend To Shareholders On February 6—After Already Having Its Business Impacted By Coronavirus, And After Acknowledging The Risks Of Such A Contagious Outbreak For Years.
Delta Air Lines Declared It Would Pay A Quarterly Dividend On February 6, 2020 Valued At $257,637,832.99 – This Came After The Company Had Already Had Its Business Impacted By Coronavirus, And After Acknowledging The Risks Of Such A Contagious Outbreak For Years.
On January 31, 2020, Health And Human Services Secretary Alex Azar Declared COVID-19 A “Public Health Emergency For The Entire United States,” While Adding That “‘The Risk To The American Public Remains Low At This Time.’” “Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the entire United States to aid the nation’s healthcare community in responding to 2019 novel coronavirus. ‘While this virus poses a serious public health threat, the risk to the American public remains low at this time, and we are working to keep this risk low,’ Secretary Azar said. ‘We are committed to protecting the health and safety of all Americans, and this public health emergency declaration is the latest in the series of steps the Trump Administration has taken to protect our country.’” [Press Release, U.S. Department of Health And Human Services, 01/31/20]
On February 1, 2020, Delta Air Lines Announced That It Was Suspending Flight To And From China Earlier Than Initially Announced Due To “New Screening Protocols Implemented By The Trump Administration In Response To The New Coronavirus.” “Delta Air Lines said on Saturday that it will suspend flights to and from China earlier than the carrier had previously announced as a result of new screening protocols implemented by the Trump administration in response to the new coronavirus.” [Tucker Higgins, “Delta speeds up coronavirus-related China flight suspensions,” CNBC, 02/01/20]
On February 6, 2020, Delta Air Lines Announced It Was Scheduled To Pay A Shareholder Dividend On March 12, 2020. “The dividend is payable to shareholders of record as of the close of business on Feb. 20, 2020, and will be paid on March 12, 2020.” [Press Release, Delta Air Lines, 02/06/20]
- The Value Of The Dividend Was $0.4025 Per Share. “Board of Directors today declared a quarterly dividend of $0.4025 per share.” [Press Release, Delta Air Lines, 02/06/20]
- As Of January 31, 2020, Delta Air Lines Had 640,093,995 Outstanding Shares. “On January 31, 2020, there were outstanding 640,093,995 shares of the registrant’s common stock.” [Delta Air Lines, Securities and Exchange Commission Form 10-K, 2019]
- 640,093,995 Multiplied By $0.4025 Is $257,637,832.99. [Search for 640,093,995 x .4025, Google, accessed 03/17/20]
- According To Nasdaq, Delta Air Lines Appears To Have Made The Payment On March 12, 2020. [Delta Air Lines, Inc. Common Stock (DAL) Dividend History,” Nasdaq, accessed 03/17/20]
Just Six Days After Declaring Their Fourth Quarter Dividend Payment, Delta Air Lines Admitted That “The Rapid Spread Of A Contagious Illness Such As A Novel Coronavirus… [Could] Have A Material Adverse Effect On Our Business And Results Of Operations.” “The rapid spread of a contagious illness such as a novel coronavirus, or fear of such an event, can have a material adverse effect on the demand for worldwide air travel and therefore have a material adverse effect on our business and results of operations. As a result of the outbreak of a novel coronavirus first identified in Wuhan, Hubei Province, China, we have temporarily ceased operations in China and the continued spread of the virus could have a significant adverse impact on the demand for air travel and, as a result, our financial results. Moreover, our operations could be negatively affected if employees are quarantined as the result of exposure to a contagious illness. Similarly, travel restrictions or operational issues resulting from the rapid spread of contagious illnesses in a part of the world in which we have significant operations may have a material adverse effect on our business and results of operations.” [“SEC Form 10-K,” Delta Air Lines, Inc., 02/12/20]
- In Their Annual Filings, Delta Air Lines, Inc. Has Acknowledged That “The Rapid Spread Of A Contagious Illness, Or Fear Of Such An Event… [Could] Have A Material Adverse Effect On [Their] Business And Results Of Operations” Each Year Since At Least 2015. “The rapid spread of a contagious illness, or fear of such an event, can have a material adverse effect on the demand for worldwide air travel and therefore have a material adverse effect on our business and results of operations. Moreover, our operations could be negatively affected if employees are quarantined as the result of exposure to a contagious illness. Similarly, travel restrictions or operational issues resulting from the rapid spread of contagious illnesses in a part of the world in which we have significant operations may have a materially adverse impact on our business and results of operations. [“SEC Form 10-K (2015, 2016, 2017, 2018, 2019), Delta Air Lines, Inc., 2015 – 2019)
The Day Before The Delta Dividend Was Issued To Shareholders, The Company Issued A Press Release Acknowledging That Coronavirus Had Been Declared A Pandemic By The World Health Organization—Delta Said It “Continues To Take Meaningful Actions In Response,” None Of Which Apparently Applied To The Shareholder Dividend.
On March 11, 2020 Delta Air Lines Issued A Press Release Noting That Coronavirus Had Been Declared A Pandemic By The World Health Organization (WHO) And Claiming “Delta Continues To Take Meaningful Actions In Response” To The Developments. “As the World Health Organization has declared the spread of the COVID-19 virus a global pandemic, Delta continues to take meaningful actions in response to feedback from our customers and in concert with health authorities, like the WHO, the U.S. Centers for Disease Control and Prevention, state and local health departments and others.” [Press Release, Delta Air Lines, 03/11/20]
- On March 11, 2020, WHO “Declare[d] The Novel Coronavirus Outbreak To Be A Pandemic.” “March 11, 2020 – The WHO declares the novel coronavirus outbreak to be a pandemic. WHO says the outbreak is the first pandemic caused by a coronavirus.” [“Coronavirus Outbreak Timeline Fast Facts,” CNN, updated 03/17/20]
The “Meaningful Actions” Delta Outlined In The March 11, 2020 Press Release Did Not Include Postponing Or Stopping Its Shareholder Dividend:
- “Delta has taken proactive and voluntary steps to help customers have a healthy flying experience. This includes a high-grade, EPA registered disinfectant used on all flights, a new fogging process often used by the food industry, state-of-the-art air circulation systems, more hand sanitizer, more gloves for our flight attendants, and additional sanitation procedures for inbound catering equipment at international gateways.”
- “Delta has and will continue to quickly make adjustments to service, if needed, in response to government travel directives and where our customers tell us they want to fly.”
- “We have waived many change fees and are working with customers to adjust travel plans, using relationships with other airlines when needed.”
[Press Release, Delta Air Lines, 03/11/20]
The Day Before WHO’s Declaration Of A Pandemic, Delta Air Lines Did Not Mention Stopping Or Postponing Its Shareholder Dividend In A Statement About Steps It Was Taking To “Address The Financial Impact” Of Coronavirus.
In A March 10, 2020 Statement, Delta Air Lines Detailed Its “Additional Steps To Address The Financial Impact Of The COVID-19 (Coronavirus) Outbreak.” In a press release titled “Delta Actions To Address The Financial Impact of COVID-19,” Delta Air Lines detailed “additional steps to address the financial impact of the COVID-19 (coronavirus) outbreak.” [“Delta Actions to Address Financial Impact of COVID-19,” Securities and Exchange Commission, 03/10/20]
- The Statement Represented Delta Air Lines’ Views As Of March 10, 2020. “Caution should be taken not to place undue reliance on our forward-looking statements, which represent our views only as of March 10, 2020, and which we have no current intention to update.” [“Delta Actions to Address Financial Impact of COVID-19,” Securities and Exchange Commission, 03/10/20]
The “Cost Reduction Initiatives” In Delta Air Lines’ Statement Did Not Mention Anything About The Shareholder Dividend. “Delta is undertaking cost reduction initiatives, including: […] Instituting a company-wide hiring freeze and offering voluntary leave options […] Parking aircraft, and evaluating early retirements of older aircraft” [“Delta Actions to Address Financial Impact of COVID-19,” Securities and Exchange Commission, 03/10/20]
Delta Air Lines’ “Cash Flow Decisions” Detailed In The Statement Did Not Mention Anything About The Shareholder Dividend, Although It Said The Company Was “Suspending” Stock Buybacks. “Delta has also made the following cash flow decisions: […] Deferring $500 million in capital expenditures […] Delaying $500 million of voluntary pension funding […] Suspending share repurchases” [“Delta Actions to Address Financial Impact of COVID-19,” Securities and Exchange Commission, 03/10/20]
In 2019, Delta Air Lines Made Over $4.7 Billion In Net Income And Gave Shareholders $3 Billion In Stock Buybacks And Dividends. During The Most Recent Year With Data Available, The Company’s CEO Was Compensated Nearly $15 Million.
In 2019, Delta Air Lines Made $4.7 Billion In Net Income.
In 2019, Delta Air Lines Made $4,767,000,000 In Net Income. [Delta Air Lines, Securities and Exchange Commission Form 10-K, 2019]
In 2018, Delta Air Lines’ CEO Made $14.9 Million In Total Compensation.
In 2018, Delta Air Lines CEO Edward H. Bastian Made $14,982,488 In Total Compensation. [Delta Air Lines, 2019 Proxy Statement, accessed 03/10/2020]
In 2019, Delta Air Lines Gave Shareholders $3 Billion In Stock Buybacks And Dividends.
In 2019, Delta Air Lines Gave Shareholders $3 Billion In Stock Buybacks And Dividends. “We returned 72% of free cash flow, or $3 billion, to shareholders through share repurchases and dividends.” [Delta Air Lines, Securities and Exchange Commission Form 10-K, 2019]
Trump Transportation Secretary Elaine Chao Was Formerly On The Board Of Directors For A Company That Merged With Delta And FAA Head Steve Dickson Worked At The Airline For 27 Years.
Transportation Secretary Elaine Chao Was On The Board Of Directors For An Airline That Merged With Delta—And She Had To Give Up A Perk From Delta After She Was Confirmed To Lead The Department Of Transportation.
Transportation Secretary Elaine Chao Was Previously On The Board Of Directors For Northwest Airlines, Which Merged With Delta Air Lines In 2008—Chao Had To Forgo “Discounted Airfare” From Delta Upon Her Confirmation In 2017. “On Tuesday, Chao was confirmed as transportation secretary, bringing extensive government experience to a Trump administration seeking to spur a major infrastructure effort and shake up Washington’s ways. […] Chao said she would forgo, during her time as transportation secretary, the discounted airfare she receives on Delta Air Lines, a legacy of her former position as a director of Northwest Airlines. Those airlines merged in 2008.” [Michael Laris, “Trump transportation secretary pick Elaine Chao confirmed in Senate, with some top Democrats balking,” The Washington Post, 01/31/17]
- Elaine Chao Was On The Board Of Directors For Northwest Airlines Inc. “She is on several corporate and nonprofit board of directors including Dole Food Co., Northwest Airlines Inc. and the National Association of Security Dealers Inc., parent company of the Nasdaq Stock Market.” [George Lardner Jr. and Frank Swoboda, “Chao Knows Her Way Around Labor,” The Washington Post, 01/12/01]
The Federal Aviation Administration’s Head Was Previously A Senior Executive For Delta Air Lines, Where He Had Worked For 27 Years.
Federal Aviation Administration (FAA) Head Steve Dickson Previously Worked For Delta Air Lines For 27 Years, Most Recently Serving As A Senior Vice President For The Company. “The U.S. Senate voted 52-to-40 along party lines on Wednesday to confirm former Delta Air Lines executive Stephen Dickson to head the Federal Aviation Administration, an agency that has faced scrutiny relating to safety over the past year.” [David Shepardson, “U.S. Senate confirms former Delta executive to head FAA,” Reuters, 07/24/19]
- “Dickson Left Delta In October After 27 Years.” [David Shepardson, “S. Senate confirms former Delta executive to head FAA,” Reuters, 07/24/19]
- Steve Dickson Was “The Senior Vice President Of Flight Operations For Delta Air Lines.” “Dickson recently retired from service as the senior vice president of Flight Operations for Delta Air Lines.” [Steve Dickson, Federal Aviation Administration, accessed 03/17/20]
- Steve Dickson Is The Current Administrator Of The FAA. [Steve Dickson, Federal Aviation Administration, accessed 03/17/20]
During His Confirmation Hearing, Steve Dickson Faced Criticism For Mishandling A Safety Whistleblower Case While At Delta “Transportation Secretary Elaine Chao praised the confirmation Wednesday, while Democrats have criticized Dickson’s handling of a case involving a whistleblower who raised concerns over safety at Delta.” [David Shepardson, “U.S. Senate confirms former Delta executive to head FAA,” Reuters, 07/24/19]