On Tuesday, United Airlines sent an email to staff announcing additional benefits as an incentive for more flight attendants to accept the terms of its Voluntary Separation Program (VSP). While “thousands” have already signed up for the program, the carrier said the numbers are not enough to avoid involuntary layoffs come October.
As anyone following North American commercial aviation news this past couple of months is aware, all US airlines that have accepted state aid in the form of federal payroll grants are prohibited from laying off any staff until October 1st. However, they are not barred from providing employees with incentives to leave of their own accord.
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Additional health credit
Many airlines are offering voluntary exit packages, warning that they will need to shrink in the fall. Of course, there are medical, retirement, and travel benefits attached to these offers. However, should the deadline for signing up for the voluntary scheme expire, and an employee be laid off when the payroll grace period is up, they have forfeited their chance at those benefits.
In addition to benefits already on offer for those willing to accept the VSPs terms, United Airlines is prepared to provide a $1,500 health credit for every year worked, up to $45,000. The additional funds would be to pay for health care, including prescriptions.
For the flight attendants of United Airlines, the deadline to apply for the VSP was initially set to June 18th. The carrier has now extended it to July 8th. The email, seen by Reuters, says the carrier needs “a lot more people” to sign up for the program if it is to avoid involuntary layoffs in fall.
“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,” the email read.
“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,” it continued.
Simple Flying has reached out to United Airlines for a comment but was yet to receive a reply at the time of publication.
3,000 flight attendants in June
Like other airlines, United is operating at only a fraction of its usual capacity as a result of the ongoing pandemic. In June, it needed only about 3,000 of its 25,000 flight attendants due to the severely reduced schedule. Furthermore, it recently announced it would be shutting down three (out of four) of its international crew bases.
Even with the support from the CARES package, US airlines are trying desperately to reduce their cash burn. Labor is generally an airline’s highest cost. Unfortunately, for employees, this now means a trade-off between certain unemployment with a benefits package and the potential of being left without a job and benefits both in October.
A United Airlines flight attendant who was not planning to accept the conditions of the voluntary separation scheme told CNBC news earlier this month,
″I am not ready to say goodbye to my career.”