MR. IGNATIUS: Hello, everybody. I’m David Ignatius, a columnist for The Washington Post. Welcome to this latest installment of our regular series of programs on “The Path Forward” during the pandemic.

This morning I'm delighted to welcome Ed Bastian, the chief executive of Delta Airlines. He's an industry leader. He's been the CEO of Delta since 2016. And, as the head of one of America's major airlines he has, I'd say, a unique perspective on what the pandemic is doing to our economy but, I think, about where we're heading in the future. So, I want to welcome Ed to our discussion and start off with a question that plays right off of the little introductory video that you all saw.

You have made a point of saying that, on Delta, you're not going to sell the middle seat--the middle seat that all airline passengers dread, you're not going to sell it--for safety reasons. So, your planes are flying, at best, at 60 percent capacity. I want to ask you how you're fairing with that approach. Other airlines, notably American, United, haven't taken the same approach and have perhaps higher load factors on some flights. How is this working for you, and how long do you want to continue with it?

MR. BASTIAN: Well, first of all, thanks for having me, David. We are focused on restoring confidence in air travel, particularly the safety and the health of our people, our employees as well as our customers. And we made a decision early on that we were going to deploy distancing procedures on board our airplanes by capping our load factors at 60 percent, blocking the middle seats, so no middle seats will be sold on Delta aircraft, through September 30th, but we're anticipating extending it beyond September 30th. As well, we haven't put a fixed date out there for that as we continue to monitor the virus.

Customers are telling us they appreciate that comfort, the having a seat next to them open, on virtually every seat of the aircraft. And as a result of that, people are coming back to Delta, and the strength of the brand is improving despite the pandemic and the challenges of the virus.

MR. IGNATIUS: So, I want to ask you, if this is a matter of passenger safety and of your brand, whether you're really not heading towards continuing this policy until we have some fundamental relief from the pandemic. We all think about a vaccine or something that would just basically put us in a different space. Do you see extending this non-sale of the middle seat perhaps until early next year, when a virus is--the vaccine is available to stem the virus?

MR. BASTIAN: We haven't put a date on it yet, David. We're going to continue to monitor confidence that consumers have with respect to our product. Undoubtedly, once we do have a vaccine and people feel they're safe from the virus, we hope air travel will continue to return to normal, at scale. But until that time, we're going to be very cautious and careful, and monitor customer sentiment and behavior. I would rather bring more flying back into the schedule, more seats, than more people on board an airplane at this point in time.

MR. IGNATIUS: Let me ask you another--about another aspect of your approach to safety, and that's your insistence on your passengers wearing masks. Why do you feel that masks are so important for the safety of your customers and your employees?

MR. BASTIAN: Well, every medical expert that we speak to tells us that masks are one of the most important safety measures we can deploy, not just on airplanes but in life, in any kind of public setting, and we are enforcing that requirement at Delta. So, when you're on the airport at Delta, whether you're on the airplane or whether you're on any Delta property, including our offices, and in public--a public setting, we're requiring masks be worn. It's one of the many safety protocols we've put in place. Masks, in and of themselves, aren't the silver bullet, but we believe the spread of the virus is significantly contained when I wear a mask to protect you and you wear a mask to protect us.

MR. IGNATIUS: So, Ed, given how important safety is to your industry and how many regulations there are to protect your passengers' safety, wouldn't it make sense for the--for the Department of Transportation simply to mandate that anybody who flies on a plane will wear a mask? Just make it a condition that--of government regulation, not your having to impose it.

MR. BASTIAN: Well, we certainly don't expect more regulation in the space, though to the extent we had federal reinforcement, it would make it easier for our people to enforce onboard our planes. But we're enforcing it, and we've been very, very public. We have currently about 130 people on a no-fly list given their refusal to wear a mask once they got on board our planes. But we're going to make certain that we enforce it even if the federal government doesn't give us the backup to put a regulation in place.

MR. IGNATIUS: And I'm just curious about the no-fly list, which is your kind of final measure. If somebody won't put on a mask, you give them a card, I gather, and it says, when you get off, you're going to be greeted by somebody who will tell you you're not going to fly on Delta again. Have you had any lawsuits challenging the legality of that? I'm curious.

MR. BASTIAN: We have not.

MR. IGNATIUS: So, let me ask you about another aspect of safety, and then we'll turn to broader business issues that face Delta and your industry; that's the question of testing for your own employees. You've formed an innovative partnership with Quest, I believe, a medical technology company, and you said a week or so ago that virtually all your employees are now being tested. And I'm curious. How often is that? Every 24 hours? Forty-eight hours? And how long does it take you to get the results from the testing regime that you've got in place, so you know where an employee is promptly after the test?

MR. BASTIAN: So, together with the Mayo Clinic as well as with Quest Diagnostics, we have deployed testing procedures both for the active virus as well as the serology test to determine whether an employee had already, previously, been exposed and carries the antibodies. We wanted to get a good baseline on our 90,000 employees worldwide as to where they stood relative to the risk of contracting the virus. We know there's a lot of fear out there around the virus. We know our employees travel the globe. They're in public settings. And we want to be able to do our very best to protect their health and safety by putting them through a fairly aggressive plan to test all of our employees.

We're still doing that. We expect to be finished over the next several weeks and have a solid baseline and then, importantly, determine what the follow-up procedures are. You know, who are the employees that are most vulnerable, that we want to maintain some very close contact with regarding tracing and testing and understanding their specific situation, and those that actually may not be as much at risk and we'll put them on a reduced protocol. But we believe it's important, not just for the safety of our own people but the safety of our customers, with our customers knowing that the Delta employees are going through tests themselves.

MR. IGNATIUS: So, Ed, in every one of our conversations with chief executives like you, since the pandemic began, we've talked about the recovery and how that process looks. And, as I said at the outset, the airline industry has a particular data set that allows you to understand the recovery and what's happening better than most. So, let me ask you, where do you stand in terms of traffic? You mentioned before we started that you're up a bit. Tell our viewers what you can about what you're seeing in terms of who's flying, where it is compared to where it was a month or two ago.

MR. BASTIAN: So, for the weekend we just concluded, David, we were flying with customers at about 25 percent of where we were the same weekend in the prior year, in 2019, pre-pandemic. So that 25 percent of the prior levels is the high point that we've seen thus far, but we bottomed out in April at about 5 percent of prior levels. So, it's a significant increase from where we had been, but at the same time it indicates, gives an indication, how far we've yet to go. We're only at 25 percent of prior levels despite the fact that this is typically our busiest time of the year.

We do see leisure travel coming back a lot quicker than business. Business travel is still greatly reduced. But people are out. You know, heading to the Mountain States is one of the places we've seen the greatest interest in travel. Salt Lake City is one of our hubs, and we're operating at probably 50 to 60 percent of prior year levels as compared to the Northeast, where that number is still down in the 10 percent level.

MR. IGNATIUS: You said in an interview with "Time Magazine" about a week ago that you thought the recovery had stalled, that that was a good way to describe where things were. Would you still say that a week, 10 days later, or are you beginning to get a little speed again?

MR. BASTIAN: No, I think--I think we're still in a stall. One of the reasons why we've picked up to the 25 percent level is that we added some additional capacity coming into the August month. So today we're flying about 50 percent of the flights that we flew this time a year ago, with about 25 percent of the people that we had this time a year ago. You can look at it in that sense. And while it's picked up a little bit, it's because we've put some additional planes in the sky. But I'd say the recovery still is largely stalled.

MR. IGNATIUS: So, I want to ask about your cash burn rate. You have said in interviews that at the low point, I guess it's when you were flying only 5 percent of your normal passengers, your cash burn rate was on the order of $100 million a day. And you said, more recently, that it was down to about $27 million a day. And I want to ask whether you think that line is going to continue to drop and whether you can see a break-even point any time this year.

MR. BASTIAN: Well, our goal is to get it down to break-even by the end of the year, but that is going to be highly dependent upon where the virus sits in the, excuse me, in the psyche of our consumer confidence. We are at a point where costs are down more than 50 percent. I don't think we can take our costs down that much lower than we already have. So, getting that 27 million down to a break-even level would require us to grow probably another 20 percent of our revenue base back by the end of the year. That may be ambitious. That's our goal. It may take us into the first quarter of next year. But we are continuing to see slow and steady improvement in reducing the cash burn.

MR. IGNATIUS: Let me ask about your employees, Ed. You have relied on buy-outs. You had, I think, on the order of 17,000 of your employees accept buy-outs. You have a crunch time coming, October 1, when the money that Delta has received under the CARES Act, a deal basically that says you'll keep paying your employees, get the money, and no lay-offs; that ends.

I'm told that you have sent a notice to about 2,500 of your pilots, warning them that after October 1 they could be furloughed. So, I want to ask you what you think is going to be likely after the 1st of October, starting with the pilots. Are you going to have to furlough some pilots after that date given the reduction in the number of flights?

MR. BASTIAN: Well, given that we are overstaffed with our pilots, as well as all the other work groups, we're doing everything we can on a voluntary basis to reduce the potential impact of a furlough. We're working with the union in that regard. Hopefully, we can reach some accommodations that would mitigate the cost of carrying the 2,500 incremental pilots that we had.

We've got a--put out last month a voluntary early retirement and separation offer for our employees. Twenty percent of our staff, including a significant number of pilots, subscribed to take that. So, we've already--on a voluntary means, you know, we're a 20 percent smaller company this month than we were just last month alone.

And through collaboration across work groups, we're hoping to spread as much work as we can amongst the existing employee base without having to avail ourselves of furloughs. So, we've got a lot of flexibility. And some of our work groups, our flight attendants, can work in catering, going over to reservations. We have work that we've outsourced in the past at the airports that we're having our airport personnel take on, such as wheelchair pushing and other cabin cleanliness initiatives. The pilots are a little more difficult given they are in a different, very different situation. But we're working with the union, and hopefully, we can get to a--we'll get accommodation there.

MR. IGNATIUS: What do you think about Congress extending the kind of payroll support that was part of the CARES Act? The legislation is being wrangled over in the Senate as we speak. It's my understanding that most of the major airlines have supported the idea of extending the benefits that will expire at the end of September for your industry further but that Delta has not. Have I got that right, and if so, explain to me why you're not supporting this extension?

MR. BASTIAN: Well, we're supportive; I think everyone in our industry is supportive. The CARES Act was incredibly successful in that it gave the airlines six months post the pandemic start to be able to have a plan to deal with the pandemic without having to deal with it and try to figure out how to save costs immediately with labor, kept our employees in place, gave us all a chance to put in an orderly plan, to do the early retirement offer that I mentioned. To the extent the Senate and the Administration, as well as Congress, was able to extend the CARES Act support post-October 1st, with a clean extension similar to what we had with the last six months, Delta is absolutely in support of that.

MR. IGNATIUS: And I assume that that would mean as part of that deal, if it's--if it's done, that you'd extend your no-furlough pledge for the duration of that extension period.

MR. BASTIAN: Absolutely. What we're looking for is a clean extension, say to the six-month period, and add another six months with the same requirements, we'd be in full support of that.

MR. IGNATIUS: One of your competitors, Southwest, has announced even before the passage of such an extension that they are not going to furlough their employees until the beginning of next year at the earliest. That's a pledge, obviously, that's significant for their employees. Have you considered something like that at Delta?

MR. BASTIAN: Well, we're trying to implement that same approach and goal. We're not there yet. I mentioned with the pilots we still have a considerable amount of work to do to assume where the cost savings from that incremental overstaffing would come from. We're doing everything we can through all voluntary measures. Our employees have been great across the company. We've had through--since the start of the pandemic over 40,000 of our employees take voluntary leaves of absence without pay during that--during this stretch. We still continue post-August 1, even after the early retirements of the employees, to still have thousands of people out on voluntary leaves without pay. So, the employees are doing a really incredible job of trying to reduce costs--it's the biggest cost of the airline is the labor cost--and mitigate any risk of furloughs, but we're not ready to declare victory on that just yet.

MR. IGNATIUS: With all of our conversations with CEOs, Ed, we've tried to ask about the future shape of the economy after we get through the pandemic, what will be different, and your business is a prime example. What do you see two, three, even five years out in the airline and travel industry?

A lot of people speculate that business travel just won't come back to the levels that it was. We've learned how to Zoom. We've learned how to do things like we're doing right now. What's your own judgment about how the--your industry will be reshaped in the aftermath of this experience?

MR. BASTIAN: Well, I think we certainly will be a smaller industry coming through the pandemic. Consumer behaviors have changed, as you indicate, particularly for business travel. I do think video technology is going to be seen as a potential substitute for business travel. I don't think it's a great substitute. You know, there's been a forced adaptation of the technology. So, people--this is the only way people can communicate in video form is to do it through a technological means.

I do think once it's safe, once a vaccine is in place, once people feel that there is a--that businesses are open. It's not just them feeling safe aboard an airplane but that businesses are open and there's business to be done. Business travel will return. I do think it will take several years, though, to see a return at anywhere close to the levels we saw in 2019. People will learn new ways to conduct travel, through video as you say or maintaining connection to people.

But the human spirit needs to--needs to be in person. It's very hard to draw that same relationship and the collaboration and creativity and spark of ingenuity that the human spirit creates for business. And as businesses start to reopen and start to look at opportunities to grow, and the economies improve, business travel will be the forefront of that. So, whether it gets all the way back in two years, three years, four years, I'm not sure, but I do think business travel will start to pick up again but probably not till sometime mid-next year.

MR. IGNATIUS: And what about leisure travel? Should we expect--are you expecting a spike? I want to call it a kind of "Whoopee! It's over! Let's go on a vacation!" Is that going to happen, do you think, sometime next year?

MR. BASTIAN: Well, we already see demand for leisure travel currently. We--that's the 150,000 people that we're carrying today. As we operate Delta, the majority, the vast majority are leisure travelers. There's a lot of pent-up demand, not just domestically but internationally, and we're still restricted from flying to a lot of international destinations. So, I do think leisure will be the first form back. Right now, we're seeing a lot of interest in international. We just can't operate with the restrictions in place for international travel. So international, for me, is something that's going to lag domestic probably by six to 12 months, but people do want to get out. There's certainly a pent-up cabin fever that we're seeing.

MR. IGNATIUS: [Audio distortion] for the world that's coming. What planes are you thinking about buying? What do you want to basically, you know, put on hold?

MR. BASTIAN: Well, one of the opportunities that we are deploying through the pandemic is called "Pulling Our Future Forward." The fuel efficiency of our fleet is going to be significantly better once we get out to the other side. We will be taking some airplanes over the next two to three years, but we're also going to be retiring a lot more than we're taking. We've already announced the retirement of over 100 airplanes this year alone: the MD-88 fleet, the MD-90 fleet, our 777 fleet, which was an older fleet and it was subscale in size. And we're moving to the newer Airbus 321neo platform, the Airbus 220s, as well as 350s. And the 737-900 platform, that's going to be the platform of choice for Delta. They're all great aircraft. The fuel efficiency is going to be markedly better over the next several years as we move that future forward.

It would have taken us probably about five years, David, to get to this point of fleet simplicity and efficiency, in the old world, as we are--as travel was in high demand, but since it's paused, it's given us a chance to accelerate the retirement of some of those airplanes.

MR. IGNATIUS: And what about the basic structure of your industry? Some of the major carriers really live on enormous debt loads. Delta and Southwest are usually reckoned to be less debt-heavy than the rest of the industry. But there are analysts who wonder if every major carrier can survive, whether some won't go into bankruptcy and whether we're not heading toward another merger wave in the airline industry, like ones we've seen in the past. What do you think about that? Is another merger wave ahead? Would that be better for travelers in the long run? What do you think?

MR. BASTIAN: I don't know that there will be another merger wave anytime soon. I do know that we are all raising capital to get through what's going to be a long, difficult winter. We raised about $15 billion of financing this year to date, and we're sitting with right now about $16 billion of cash in the bank. I think that will certainly--and we're looking at additional options in this quarter as well, but I certainly see Delta as having the cash and capital to get through the worst of this period of time.

Whether it's going to lead to additional merger activity, it's hard to tell at this point. There's nothing at Delta that we're thinking in that line. We're really trying to do our very best to take care of our own customers, our own people, and not worry about what the--what a merger could be.

MR. IGNATIUS: And what's your guess about what kind of air travel experience people want--will want? There was a rise over the last couple decades of the "no-frills" airlines, but you know, Delta has always been a full-service airline, prided itself on its service levels. What do you think is the winning position going forward in terms of the kind of service you deliver?

MR. BASTIAN: Well, we're going to continue to invest in our brand and the strength of the service. Delta is seen, as you indicated, as a premium airline, a premium brand that customers appreciate. I think as you get through the pandemic, people are going to have a newfound appreciation for the quality of the service, not just the safety record that Delta has but the health and the well-being of our passengers, and the comfort of our passengers on board our planes. People are going to be looking to invest in the resiliency of their own travel experience, and I think Delta is going to be in a well--well-positioned for that, to come out on the other end an even stronger airline. We may be smaller, but we're going to be stronger and more resilient on the other side of this, and I think that's what customers are going to be looking for.

Price is a key determinant for a lot of travelers, those leisure travelers. Business travelers tend to pay a little bit more because they want the confidence and the comfort and safety with a full-service carrier, and that's our bread and butter.

MR. IGNATIUS: So, I want to ask you a final question, wrapping up this very informative conversation. It's one we've asked many business leaders, and that's a question of racial justice and seeking greater racial diversity in your senior ranks. Numbers that I've seen show that you have two black board members out of 12 and that there are no black men or women among your top 11 executive positions. What plans do you have to try to improve those numbers?

MR. BASTIAN: Well, we're accountable for those numbers, David, as you mention. And with the recent violence that we've seen, with the killings of George Floyd and certainly in our community here in Atlanta, Rayshard Brooks, it's brought the pandemic and the call for racial justice together. That's created, I think, an even greater outcry for corporate leaders to step up and to own the accountability that we have to take care of all of our people, and that includes their opportunities for not just equality within society but advancement within our communities and our companies.

One of the things at Delta we're doing a lot of work on is trying to make sure we really understand what systemic racism means and how to be anti-racist and how to be a true ally to our black and brown colleagues. We need to grow our numbers. Today, about 40 percent of our employee base is black and brown. Our leadership is only about 30 percent throughout the company, of black and brown colleagues that are in leadership positions in the company. We need to do better. We need to reflect within leadership the same ratio and diversity and inclusion that our broad employee base has, as well as our customer base has, as well.

I think one of the aspects to accountability, in addition to understanding, with issues that our black and brown colleagues work in, is understand how can we pull up into the board, into the executive leadership ranks, our black and brown fellow colleagues. Spending a lot of time understanding the numbers as you dissect, with diversity and inclusion being a real important part of our strategies over time at Delta, I think our black and brown colleagues have been lost in the numbers, and we haven't made the progress with our black and brown colleagues that we've had with other minorities, with women. And we need to pull up the accountability that I have, starting at the top, as well as all of our employees do, to provide a better outcome for those employees.

MR. IGNATIUS: Ed Bastian, CEO of Delta Airlines, thank you so much for a rich conversation.

We will be back at Washington Post Live tomorrow at 12:00 noon for a conversation about race and representation in fashion and entertainment, with style icons and activists, Beverly Johnson and Tina Knowles-Lawson.

And on Tuesday, we'll talk about conservation, sustainability and climate change with former President of Ireland, Mary Robinson, Los Angeles Mayor Eric Garcetti, and the former Executive Secretary of the UN Convention on Climate Change, Christiana Figueres. So please do join us at Washington Post Live for these upcoming sessions.

Again, thank you to our guest today, Ed Bastian.

[End recorded session.]