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United Airlines Offers Cabin Crews Additional Incentives to Accept Buyouts
United Airlines improved a voluntary exit package for its flight attendants and extended the application deadline for the buyout on Tuesday, adding that it needs “a lot more people to sign up” to avoid involuntary layoffs once CARES money runs out at the end of September, Reuters reports.
The deadline to accept the buyout was originally June 18. But United’s message sent just 48 hours before that original deadline, said that though “thousands” have accepted the deal, it is not enough. United reportedly needs up to 3,000 of its roughly 25,000 cabin crew to accept its buyout and it has extended the deadline to take the new offer until July 8.
In addition to other medical, retirement and travel benefits already offered, United has now added a $1,500 health credit for every year a crewmember has been at the airline, up to $45,000.
U.S. airlines that accepted bailouts through the federal CARES act earlier this spring are not allowed to involuntarily furlough or lay off any workers until Oct. 1. But United’s efforts to have its staff voluntarily leave the company conveys that the company, like most airlines in the United States, will be significantly smaller this fall that they were at the beginning of the year.
“While we’re seeing some glimmers of hope in the number of customers traveling, we know that we are still a very long way from returning to where demand was at the end of 2019,” United told Reuters. “That means a quick recovery is not likely so we need to continue to focus on cost-cutting as we plan to be a significantly smaller airline in October.”
United’s offer is undoubtedly going to be taken differently by various employees. For older cabin crew, retiring a few years early may be worth it considering that the job market in a few months is very uncertain; taking extra benefits now could be an added bonus versus retiring in a few months or years with fewer perks.
The Tough Decision of Taking a Buyout
However, for younger crewmembers or those planning to be in the industry for years to come, taking a buyout is a tougher decision. Considering that passenger loads in the U.S. are on a steady increase and that 3,000 people is only 12% of United’s cabin crew staff, it may be worth it to try and stick it out past October. Since a number of cabin crew have already accepted United’s deal, there is a decent chance that crew who want to stay at United past October could do so.
“Frankly, [sticking it out is] a highly personal decision,” Henry Harteveldt, president of Atmosphere Research Group, told Dallas Business Journal. “A lot is going to depend on, how transferable are their airline industry skills? How much do they like working at an airline?”
And while some airline employees say that they would be happy to escape the turmoil the airline industry is in, others are hesitant to risk being unemployed for months or years and managing the messy U.S. unemployment system.
Scott Kirby, United’s new CEO, has said that he is ready to be aggressive making changes this summer and fall to protect the airline’s future. Still, he has said that he wants to keep as many employees at the airline as possible to make United more poised to adapt to increased passenger counts as needed.
“If we can keep [employees] kind of on the sidelines a little bit while we get through the crisis then when there is a recovery, and there will be a recovery … we can snap back quickly,” Kirby said. “If we furlough people, if we lay them off, the snapback is going to be really, really hard.”
“By the time we get to Oct. 1, hopefully, we will have continued to see a recovery in demand but none of us think it’s going to be back to 100% and that is going to lead to some hard decisions,” Kirby added in a CNBC article.
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