Delta Air Lines is one of a number of companies that is threatening penalties for unvaccinated workers, a topic that has become increasingly controversial recently.
Delta CEO Ed Bastian announced to employees Wednesday that they could be responsible for $200 monthly hikes to their health insurance premiums starting Nov. 1 if they fail to get vaccinated against the coronavirus. The CEO noted that exorbitant costs to cover employees who are hospitalized with the virus is an issue for the company.
In addition to the health insurance premium increases, Delta is also including immediate indoor mask restrictions as well as weekly coronavirus tests beginning next month.
There has been an increase in anti-vaccine support across the country, with several legal battles now taking place. Attorneys from New York-based firm Siri & Glimstad have performed millions of dollars of legal work for one of the nation’s foremost anti-vaccination groups, and are now co-counsel against the Durham County, WI Sheriff’s Office, where disgruntled anti-vaccination supporters are looking for change.
“The message is, ‘Maybe you should reconsider because you don’t want to end up in court,’ ” said Dorit Rubinstein Reiss, a professor at the University of California’s Hastings College of the Law. “I think that works.”
“People have been through a lot, right, this last 18 months. I just really think a mandate will create more animosity than it will be helpful,” said Rebecca Burns, health officer for the Branch-Hillsdale-St. Joseph Community Health Agency in southern Michigan, where vaccine rates are among the lowest in the state.
Meanwhile, Delta’s measures are the latest attempt by a U.S. corporation to increase vaccination rates in an attempt to stamp out the coronavirus.
Although it has been perceived as restrictive, Delta was less stringent than competitor United Airlines, who established much more significant mandates earlier this month.
“The average hospital stay for COVID-19 has cost Delta $50,000 per person,” Bastian said in an employee memo. “This surcharge will be necessary to address the financial risk the decision to not vaccinate is creating for our company. In recent weeks since the rise of the B.1.617.2 variant, all Delta employees who have been hospitalized with COVID were not fully vaccinated.”
While United Healthcare administers the airline’s health insurance plans, the company says it was Delta’s decision to push for vaccinations.
Delta also said that starting Sept. 30, “in compliance with state and local laws, COVID pay protection will only be provided to fully vaccinated individuals who are experiencing a breakthrough infection.” Unvaccinated employees who contract COVID, without exemptions, will need to employ sick leave otherwise.
CEO Bastian said that roughly 75% of Delta’s roughly 75,000 employees are already vaccinated and that “aggressiveness of the [Delta] variant means we need to get many more of our people vaccinated, and as close to 100 percent as possible.”
The push to vaccinate employees could be aided by the recent full FDA approval of the the Pfizer vaccine this week as well.
The FDA first granted Emergency Use Authorization for the injection back in December. Amid the drive to get America vaccinated, over 204 million of the Pfizer shots have been given, based on data gathered by the Centers for Disease Control and Prevention.
Other air carriers like Alaska Airlines earlier this month told staff that it was also looking into requiring employees to be vaccinated against the coronavirus, but that the company would only push for such measures after one of the vaccines received full approval. Meanwhile, Frontier Airlines said this month that employees have to be vaccinated or test regularly for COVID.
For investors looking at a way to use ETFs to trade airline companies and the aerospace industry as a whole, funds to consider include the iShares U.S. Aerospace & Defense ETF (ITA), which is 0.38% higher on Wednesday, the Invesco Aerospace & Defense ETF (PPA), and the U.S. Global Jets ETF (JETS), which contains a number of the major airlines like Delta and American.
According to ETFDB.com: “The U.S. Global Jets ETF (JETS) tracks an index of companies involved in the air travel industry, including airline operators, manufacturers, airports and terminal services. Top holdings include airlines like American, Southwest, United and Delta. The bulk of its holdings are in North American securities, with smaller allocations to companies in Europe, Asia and Latin America. JETS is the only real pure-play air travel ETF on the market, though there are competitors in the broader travel and transportation space, such as the SPDR S&P Transportation ETF (XTN), the iShares Transportation Average ETF (IYT), the ETFMGTravel Tech ETF (AWAY), which launched in early 2020, and the triple-leveraged Direxion Daily Transportation Bull 3X Shares (TPOR). JETS management fee is a bit high for indexed equity ETFs, but comparable to other niche products.”
For more market trends, visit ETF Trends.