Delta CEO Ed Bastian on Leading an Airline Through Two Years of Pandemic Disruptions

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1:10Hi, I am Adi Ignatius, Editor-in-Chief of Harvard Business Review, and this is HBR's The New World of Work. Each week on the show, we talk to a top-tier CEO or business leader about how we can work together more effectively. When do we come back to the office? What kind of technology should we use? What's the point of an office anyway? So we have a great guest today. Before I introduce him, though, I want to put in a quick word for our friends at Unisys. Unisys is an IT company that builds critical solutions trusted by demanding businesses and governments around the world. They partner with clients to enable cloud transformation, protect critical operations, and empower the modern workforce.

1:51Visit unisys.com to learn more. So our guest today is Ed Bastian, the CEO of Delta Airlines. Ed has been at Delta in a number of roles for more than 20 years, and he's served as CEO since 2016, earning the airline widespread praise, particularly in its handling of the complexities resulting from the COVID pandemic. He also, by the way, has a podcast called Gaining Altitude, in which he interviews CEOs and other prominent figures. So welcome to the show, Ed. Very good to be with you. So now I have to say, it's not enough to run an airline. You have to come onto my turf and do a podcast too, right?

2:31Well, you know, it's interesting. We've got a lot of people very curious about what's going on in our space. And it gives us a chance to bring others into our universe as well as going into yours. So, you know, we sort of build this show as, you know, Ed Bastion, this episode is, you know, imagine somebody who could be more on the front lines of the challenges that we all face to maybe lesser degrees that this pandemic has brought to keep an airline going. That's really what I want to start. I mean, you've got teams. We talk on the show about white collar workers. Do you come back to the office?

3:09Do you work remotely? You've got people who have to be there physically, who have to deliver physically. What has it been like to try to guide a business through all this? Well, it's been an interesting two years, that's for sure. In the last six months, things have certainly settled. They don't feel settling, but they are settling down. And we look forward to getting through this latest variant Omicron here very, very soon, according to the doctors, and getting an opportunity to return as close to normal as possible. But you're right, Adi, throughout the entire pandemic, our people have not had the option to work from home.

3:45Very few have. And as a statement of unity, we all came back to the office starting last June. Requirement to be back into the office to ensure that we're all together, we're all navigating this challenging environment. And there's been such a great spirit about it. People are excited and we're excited when we all came back last June to be together and we see real strength in that collaboration. So there's so many things I want to follow up on, but let's start with when you came back to the office together. Again, this is before Omicron kind of maybe upset those plans. But I remember you were relatively early and relatively forceful saying, I want my, you know, I want people to be sort of back in their seats in the office, that there is a value to that.

4:31You know, a lot of companies aren't there. They're somewhere else entirely. So talk about, I mean, you must have a workforce that has differing views on it. How do you, How do you make the office, how do you make this make sense that we really need to be together? How do you make that case and what have you seen? Sure. Well, first and foremost, headquarters is not in charge of anything. We use the term headquarters. I think we need to. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications, and more.

5:08Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast. That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed sponsored jobs. This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web. like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks.

5:42Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required, compatibility and availability varies 18+. Let's start looking at our lexicon, and it really needs to be a support center to the people out in the business that are making it happen out in the field. And well over 80 % of our employees do not have an option, did not have an option, including in the most difficult and darkest days of the pandemic, they needed to show up and perform their responsibilities, taking care of our customers and taking care of our airplanes and making certain that the world keeps moving.

6:18And if you're going to be a true servant leader, you come back and you serve, which is what I asked our people to do. Was everybody thrilled? I think a lot of people were happy. Was there some that couldn't come back. Yes, we were sensitive to that if people had some unique situations. But I wasn't going to leave it to our people to decide how they best fulfill their service obligation. We wanted to serve together. And the majority of our people were very happy to be back. All right. So now let's talk about this moment where Omicron is not as serious, apparently, not as fatal as previous variants, but obviously incredibly contagious.

7:00I mean, I've read that I think the figure was that 8 ,000 Delta employees have contracted COVID within the last four or five weeks. Lots of flight cancellations, not just for you, but for the industry as well. How do you cope? I mean, you know, how do you cope with a hit like this? There's sort of eye-popping numbers to outsiders, but you guys keep moving. How do you cope with hits like this? Well, I called it the final kick in the teeth from the pandemic, Omicron, because if you recall, Thanksgiving. We had a very, very busy Thanksgiving holiday. A lot of people back in the skies for the first time.

7:38And we ran basically a perfect, you know, very, very clean operation, staffing all in the right places and got everybody where they needed to be on time. Two days after Thanksgiving ended, we first heard word of Omicron. And then within just a matter of weeks, it hit us hard in this country, right at the same time, we were experiencing the busiest travel surge for demand because of the Christmas and New Year's holiday. A lot of people had put off traveling to that point, all hitting at the same time. So the confluence of Omicron, the most infectious variant we've seen, coupled with the highest demand level.

8:18And a lot of our people, as a result, coming down with the, even though our people are vaccinated and boosted, still coming down with the disease. You know, one thing that we did, Adi, is that throughout the pandemic, we've encouraged testing. We've vaccinated people. We give them tests. And so we probably had a better pulse on who was really coming down with Omicron than most other companies, certainly most other airlines. And as a result of that, we took a pretty big hit because we saw it happen within our own workforce very, very quickly. However, over the course of the next couple of weeks, certainly by second week in January, you know, things are pretty much back to normal here at Delta.

9:03It was a tough two weeks on the cancellations front. But for the last 10 days, we haven't had more than just a handful of cancellations a day due to staffing or Omicron out of over 4 ,000 operations that we fly. So it hit us hard. We worked through it. Fortunately, there's been no severe illnesses caused by it. And people are now back to doing what they do best, which is taking care of travelers and getting them safely to their destinations. Yeah, it's all quite amazing to ponder from the outside. I know that you are still encouraging or requiring passengers to wear masks. And, you know, maybe some of your competitors feel less strongly about that.

9:41But I do want to ask, and at least one question has come in. You know, did you ever consider requiring, you know, proof of vaccination the way some restaurants do or, you know, Broadway? When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast. That's Indeed.com slash podcast.

10:17Terms and conditions apply. Need a hiring hero? This is a job for Indeed Sponsored Jobs. This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required, compatibility and availability varies 18+. Shows do or something like that as a condition for flight.

10:53We haven't. We certainly have asked, a lot of people asked about it, and it's been a topic of conversation ongoing. Internationally, it is largely a requirement to get into many countries around the world. You need to be vaccinated, including our country, and testing requirements. And so there's a lot of paperwork. It makes it very, very difficult to travel internationally when you think of all the requirements and the requirements continuing to change and shift, particularly with this latest variant, all the restrictions went back up again. So it's a huge deterrence to travel when you aren't quite sure what exactly you need or what you're going to find when you show up.

11:32Domestically, we've been able to keep the airways open throughout the entire pandemic because we're deemed by the government to be an essential service. People need to get to where they need to go for medical reasons, for health reasons, for jobs, et cetera. And so it's not like going to a restaurant or going to a movie is where you've got various options. A lot of people don't have options. They need they need to travel and they need to to get to where they're at. Secondly, the we carry at Delta millions of people a week to be able to check and validate not only vaccination records, but potentially exemption requirements and the like would be just a huge logistical snap spoo that would cause us to really slow down the operation.

12:15and put the onus back on our people to try to manage who gets on and gets off planes. So the airplane is the cleanest place you can be. Everyone on that plane is wearing masks. The air filtration systems are the highest quality. They change out the full air environment within a plane every two to three minutes while we're in flight. People are adhering to the requirements. They're not moving around. They're buckled into their seats. So I don't think there's really a reason why we would need to check vaccinations in order to fly domestically, coupled with the fact that demand customers tell you they're ready to go.

12:56It's not as if it's deterring travel. People are ready to travel. If you just joined us, I'm here with Ed Bastian, the CEO of Delta Airlines. There are a lot of great questions that are coming in, but if you have a question that you'd like me to pose to Ed, put it into the comments and we will get to those in a little bit. But this also makes me think of the talent challenge. And, you know, I'm interested in how tough it's been to retain talent. I mean, I don't know how widespread it is, but we all see videos of air personnel being abused by patients who aren't happy with mask requirements or whatever.

13:28So, you know, to what extent or what have you learned about what you need to do to retain top talent at this point? Well, I think everyone in this environment needs to ensure they're staying very, very close to their people, they're communicating, that there's a level of transparency about what's happening, and never more so than the air travel experience with all the challenges that you highlight. Yeah, there are certainly cases that are well-documented of air rage, and all the airlines have had them. Please say Delta, they're very, very few. We've been relatively, I would say unaffected, but the numbers are really quite low for us.

14:08Our people are trained to handle those situations. They do a fabulous job. And candidly, customers police it too, you know, on board the planes. You know, when somebody is not following the instructions of a crew member, it's not just our crew members. You know, the fellow customers step in and ensure that the flight is to go off on time as safely as possible. When you think about the bigger question about retaining and recruiting, we've hired 9 ,000 people over the course of the last year. We had a very, very large early retirement opportunity for our people. It was voluntary. About 20 ,000 people took the opportunity to retire.

14:48When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast. That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed sponsored jobs. This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new.

15:25It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required, compatibility and availability varies 18+. In the latter part of 2020, so we needed to supplement our team, And we've been hiring all across the board from pilots to flight attendants to technologists, to aircraft mechanics, to reservationists, airport workers, you name it.

15:58We've been bringing a whole new generation into the company. And they're doing a fabulous job. Our brand is strong. Our hiring brand is strong. People want to work here. Glassdoor just ranked us yet again in the very top companies to work for as anonymously by the people themselves. that have the best sense for what it's like to work here. It's a difficult time, but it's an exciting industry. And people know we're going to get through it, and they want to be part of the world. And when you join an airline, you're really signing up to be a citizen of the globe and being part of what it takes to keep the world moving together.

16:35So because what you do is so visible, we all fly Delta. We all feel we know the brand. And, you know, I think in some ways you're a paragon for what it means to lead a business through a challenging period. So, I mean, your industry has its own specific needs, but, you know, I think we all need to get used to the idea we're going to be leading through crisis. It may not be the pandemic. It may be something else, but that sort of feels like the era we're in. So can you maybe offer some general lessons about, you know, how to lead successfully during, you know, a crisis that just requires full attention?

17:11Well, one of the most important things I've already mentioned is about communications, about staying very, very close to your team, to your people, to being authentic, to being transparent. It's easy when times are difficult to want to shy away when you don't have the answers to the questions that you need, whether people legitimately ask why it's never more important to be visible and let people know what you know and what you don't know. And we still to this day, We have a lot of questions that we don't have the answers for, but people respect the fact that we're honest with them. We tell people what we need.

17:43We need them to know and do, and when they ask us, we give them our very, very best insight as to how we see the future and what's happening around and why we do make some of the decisions that we've had. We have found our employee engagement, despite as difficult a period that this industry has ever seen in its history over the last two years, you would imagine employee engagement to actually take a nosedive. People would be pretty discouraged or put off or upset. And we have found just the opposite as a result. Our employee engagement scores have stayed just as strong throughout the pandemic as ever because there's a real pride in what we do.

18:23As I tell our people, the pandemic didn't, we didn't have a choice in that. We didn't choose the pandemic. The pandemic chose us and our company has never needed us more. Our customers, our community have never needed us more than right now. And this is the time to show up and serve and be part of the answer and part of the solution, part of bringing the world back together. And it's a noble mission. We fulfill, we fly a noble mission in normal times, but in times of difficulty, it's really important that you fulfill that mission honorably and with passion. And so it gives people a real purpose.

18:59And I'd say that's the second thing, is ensure that as you're going through this hard time and you're coming out of this hard time, you reflect on your purpose. You reflect on what you learn. You reflect on what you're going to be doing. But more important than ever, I think it's all given us a chance to sit back and ask ourselves the tough questions as to why do we do what we do? Why is it important? How are we going to get through this? And what it's going to take to ensure that we bring our people with us. And so that's all wrapped into the purpose. And our purpose here at Delta is to ensure that no one better connects the world.

19:32And you think about the world needing air travel. It needs it more than ever. We are as isolated and distant from each other than I can ever recall. We just need to get back together. And the airlines are going to be a big part of bringing the world. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications, and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast.

20:07That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed sponsored jobs. This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required, compatibility and availability varies 18+.

20:42We also talk a lot on this show about the extent to which business, businesses, CEOs, can be involved or need to be involved in social issues and health issues. You had a very public exchange with the CDC when you were making the case that vaccinated people who test positive maybe should be isolated for a shorter period than what the CDC was advocating. And in fact, the policy evolved. Can you talk a little bit about that as an example of private sector government interaction? Yeah. Well, we need to be very, very active, working together, support with the government, the government support back and ensuring that we're we're tackling this this huge challenge together with the best minds and the best science guide in the path.

21:31And one of the early indicators that we saw in the middle of December as our people started to come down with Omicron was we were hearing conflicting messages. We were hearing early on that while it's highly contagious, the impact and the period of contagion seems to be a lot less than the original virus. And the guidance with respect to quarantine and isolation had never changed from the very first onset of COVID almost two years ago. And so we asked the question to the CDC because we were having thousands and thousands of our people that we were having to pull out of the operation in a very disruptive manner and isolate when the science didn't seem to suggest that that was necessary.

22:17The sciences, and I think the sciences continue, we're continuing learning, but with Omicron, there's a pretty concentrated couple of days before you're symptomatic and a couple of days after where you're highly contagious. But after that, your period of isolation requirements really drop immensely. And if you can test, and I know there's a lot of controversy around the testing requirement, but if you could test at the end of day five that you no longer have the virus present, Why are you asking businesses to keep their staff, their critical staff, away from the job for another five days? And more importantly, that airlines, hospital workers, firemen, police, people that are providing essential services that we need, particularly during a holiday season, to keep our society moving.

23:05It's time, we thought, to update the guidance. And fortunately, the CDC took our input. We don't have any influence with the CDC, but they took our input. They received the same question from a number of other industries as well, and they updated the guidance. It was really appreciated. And by the way, if you come down with Omicron and you're forced to isolate for 10 days during a holiday period, that almost seemed punitive to people during that period of time. And the other thing that I was worried about personally, people wouldn't even testify now if they had it at that point. If they realize I'm going to miss the holidays, I'm going to miss the holidays.

23:42We want to encourage people to find out, to keep getting tested and to continue to watch the signs, to stop the spread. And the policy seemed like it was pushing people in the other direction. So beyond that, so that was an issue of immediate concern, obviously, to you and your employees and your business. You know, other social issues that seem to cry out for businesses to get involved with if they dare. I mean, how do you choose the social issues, political issues that you will get involved in personally? And how do you kind of manage and protect a brand reputation as you do? Yeah. Well, first and foremost, it's always difficult to decide that.

24:24And candidly, my natural inclination is not to get involved in any of them because it's in a world as divided as we are currently in. All you know is you're going to upset a lot of people. So you've got to be cautious. But at the same time, when you see something happening in your community that runs counter to the values of the company and what you espouse, particularly on behalf of your people, sometimes you feel compelled to voice your view, your concerns, and to engage. and there's there's endless number of topics that you could pick on a social matter to engage and I think you have to be very careful and very cautious as you know we did engage on voter rights legislation in Georgia we weren't the only one a number number of companies did as well because we saw the effect it was having and within our within our team and within our people and our people were looking up to us asking us after all we've been through over this this last year, two years, and the challenges coming out after the George Floyd situation in the middle part of 2020 and the commitments that we made to continue to push forward and fight to ensure that everyone has equal access, everyone has equal opportunity and do our very best to promote an equitable and diverse workplace as well as community.

25:51How can we sit by and be silent. So that was a tough one. But you've got to be very, very careful in terms of which issues you choose. Now, I know you've made it clear that climate change is an issue of importance to you personally. How does an airline, a huge user of fossil fuels, credibly contribute to the sustainability, the climate change issue? Well, that's a tough one. And because it's a tough one, and makes it a very important one. We're in what's classified as a hard to decarbonize industry because 98 % of our emissions, our footprint, is jet fuel, is a fossil fuel. We do not have a substitute source to propel or use for propulsion for our aircraft as a source of energy.