Money News

United Airlines sweetens exit deal for flight attendants, others

CHICAGO (Reuters) - United Airlines sweetened on Tuesday a voluntary exit package for frontline employees like flight attendants and gate agents, saying it needed “a lot more people to sign up” to avoid involuntary layoffs in October, according to a staff email seen by Reuters.

FILE PHOTO: A United Airlines passenger jet taxis at Newark Liberty International Airport, New Jersey, U.S. December 6, 2019. REUTERS/Chris Helgren/File Photo

The email, sent 48 hours before a June 18 deadline, said that although “thousands” have signed up for the voluntary exit package so far, the number is not enough. United extended the deadline to July 8.

U.S. airlines cannot force any furloughs or layoffs before Oct. 1 under the terms of a government stimulus package that awarded money for employee payroll through September.

But many, including United, are trying to induce staff to depart sooner, warning that airlines must shrink in the 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,” United said in the email, adding that a quick recovery was unlikely.

Under the new deal, frontline employees would receive a $1,500 health credit - to pay for health care, including prescriptions - for every year worked, up to $45,000. The credits would be in addition to other medical, retirement and travel benefits already offered.

United declined to comment.

The company has offered a number of exit packages to union employees based on factors like seniority, age and workgroup, as well as to management and administrative staff, which it is aiming to reduce by 30%.

Last month, United told employees that it only needed about 3,000 of its about 25,000 flight attendants in June given its reduced flying schedule, Reuters reported.

Like other airlines, United is only operating a fraction of the flights it did last year.

Reporting by Tracy Rucinski; Editing by Muralikumar Anantharaman, Gerry Doyle and Jonathan Oatis