Why United Will Try $100,000 Buyouts to Shed a Few Flight AttendantsBy
United Airlines is offering some flight attendants as much as $100,000 to leave the company, hoping that those with the most experience—and largest paychecks—will be willing to move on. The nation’s second-largest airline also recalled more than 1,400 flight attendants who were on furlough.
“The cost is less to have a flight attendant with less experience vs. one that has more,” United spokeswoman Megan McCarthy told Bloomberg News. The airline has about 23,000 flight attendants and wants to reduce that count by about 2,100.
So what drives the six-figure offer? Labor costs have become one of the central issues United has targeted in its push to complete its 2010 merger with Continental. The airline is seeking some $2 billion in cost savings as one way to improve its financial performance, which has lagged those of rivals Delta and American.
United and the Association of Flight Attendants have spent more than two years to reach a new joint contract. The flight attendants now operate under separate pre-merger contracts and there have been tensions between the two groups about which aspects of each to retain in a merged agreement.
The deal announced on Monday is one step to help smooth the path to a single contract for flight attendants. The union called the proposal “unprecedented” and said it would give flight attendants “a unique opportunity to continue moving up the seniority list and furthering their careers while providing the ability to pursue other endeavors to those who choose.” Neither the airline nor union disclosed the requirements for a flight attendant to receive the full $100,000 buyout or how many were likely to receive that amount.
In 2013, United announced a “voluntary” furlough program in which it continued paying medical benefits, though not salaries, for about 1,100 flight attendants. In January the company angered flight attendants with plans to furlough about 700 of them who did not sign up for the earlier furlough.