United Airlines offers buyouts to 600 flight attendants to cut costs
09 Jun 2008
Several smaller airlines have already gone bankrupt after crude prices reached record highs. Even the bigger ones are trying to cut down on costs by rationalizing flights and charging for hitherto uncharged passenger privileges like check-in luggage. (See: Airlines may suspend flights on unviable routes)
Now, United Airlines, the world's second-largest airline, has come out with a voluntary retirement scheme for its flight attendants which will enable to prune its workforce by 600 members.
The agreement with the Association of Flight Attendants-CWA calls for severance payments based on years of service, as well as travel benefits, UAL Corp.'s United said. The union told members in a letter that the ''early-out'' offer is the first for the airline's attendants since the 1980s.
The applies to flight attendants who are at least 45 and have spent 15 or more years with the airline and affects 3.5 percent of the labour group's 17,000 members at the Chicago-based carrier.
The buyouts come after United this week said it would eliminate as many as 1,100 jobs as it closes its low-fare Ted airline and grounds 70 planes.
The offer would provide $500 for each year of service as an attendant up to 25 years, or as much as $12,500. The payment would be in 12 equal installments starting in January. Bidding begins on 9 June and will close on 7 July. As many as 600 early-out packages will be awarded by 15 July, with an effective date of 1 Aug.
These details were given by Greg Davidowitch, the union's president at United, who stressed on the voluntary nature of the offer.
United is expected to announce job cuts soon to reflect domestic capacity cuts of 14 percent by the end of this year and another 11 percent in 2009. The airline's vice president Alex Marren said that this agreement with the Association of Flight Attendants will mitigate the impact of its recently announced capacity reductions. (See: United Airlines to slash capacity by 14 per cent, cut up to 1,600 jobs)