Facing a historic collapse in demand and grim prospects of recovery, United Airlines is further incentivizing employees to accept voluntary separation packages with several enticing new benefits.
United Is Warning Of Steep Job Cuts In October
Although the CARES Act mandates that United abstain from any layoffs until October 1, 2020, United is already warning employees that steep job cuts will be necessary after that point.
Earlier this month, United tried to unliterary cut the hours of all employee groups using a loophole in the CARES Act. One union sued and United backed down, though the forced reduction in hours still applies to non-unionized management and administrative (M&A) employees. M&A employees must take one day of unpaid leave per week and also start burning their vacation days.
In order to avoid as many furloughs as possible, United is pushing employees hard to accept voluntary separation packages. Thus far, the number of takers has been limited, though United just sweetened the deal for M&A employees
United’s New Travel-Friendly Separation Packages Offer To M&A Employees
Business Insider shares a leaked memo to M&A employees offering a number of new incentives for taking an early leave.
Key Facts:
- Employees who accept the voluntary separation offer will stop working in June but be considered employed and on leave until December 1, 2020
- Employees will receive full pay through June 30, 2020, then 33% pay between July 1 and November 30
- Employer-subsidized healthcare benefits will also continue through November 30
In exchange for taking the early leave, employees may receive:
- 250,000 MileagePlus miles
- Platinum frequent flyer status (unclear how long it is valid for)
- Five years of active employee travel benefits
- Retiree travel benefits after the five years
- Priority access to job postings if the economic environment improves and they later wish to re-apply
Live and Let’s Fly not been able to procure a copy of the full memo yet, nor will United confirm any of its details.
ETA: @xJonNYC got a hold of part of the memo, below:
Nice Offer, But…
It’s an attractive offer in many ways. United already plans to cut 30% of M&A employees in October. The gamble then becomes will you survive or not, because if it does not appear likely..these are nice extra benefits.
Cynically, you could say there is no point in top-tier status or even non-revenue, space available (NRSA) flight benefits if you have no money to spend. Yet those 250,000 miles could go far on United’s partners and having active duty boarding priority for pass travel will be immensely beneficial as more flights resume.
I had a friend once who worked for Air New Zealand. The airline went through a tough time and offered voluntary separation packages. He took it. Four months later, they rehired him. He kept all the benefits of the exit package and his additional salary on top of that. Then they did again, he earned additional benefits…and guess what? He went back to Air New Zealand a third time.
My point is that talented, skilled, passionate workers may lose their jobs, but when travel comes back (and it will…eventually) there will be a place for them if they have not already moved onto bigger and better things.
CONCLUSION
Live and Let’s Fly has several contacts in M&A who we will speak to over the weekend about this latest offer, dubbed VSP2. While I appreciate the creativity, I have to imagine United won’t get too many takers in this dismal job market.
Is Platinum status and 250,000 miles a smart incentive or an act of desperation on the part of the United?
image: United
As a former airline employee, the one thing I miss about working for an airline, is the staff travel benefits. I was upgraded to F class on virtually every domestic flight albeit on standby according to travel code. I had seen most of the world by the time I was 25 and all of it at anywhere between 50-90% off the stamdard Y fare. I thought nothing of flying SYD-LAX for $250 return on a choice of airlines flying that route. Nowadays, I’m crammed into a Y class seat like the majority of people and whilst I still enjoy air travel, its not half as comfortable anymore. Especially when you pay so much more for a seat that was once so heavily discounted for me. So I think this is a great offer for United staff. I’d take it in a flash …
I talked to an Alaska Airlines customer service representative yesterday because my Vegas trip at the end of the month had been rerouted in such a bizarre way (from LA to Portland with a long layover) that she cancelled it for me and immediately issued a refund — no questions asked (thank you, Alaska Airlines!) We then talked about the current situation, and I mentioned I’ve had to deal with other airlines like United. She asked me, “How did that go?” And I bluntly told her, “Not well. I’m unwinding my relationship with United because of the harsh treatment regarding refunds”. Then she said, “We’ve heard United’s going under in October.”
!!!!!!
I was taken aback by her words. I had heard the same thing but assumed it was aviation chit-chat from frustrated customers who wished ill on UA. But this was an insider, and she didn’t mince words:
“We’ve heard United’s going under in October.”
I’m burning my last 25K UA miles this weekend.
@ Andre — I think United may very well “go under”, but certainly not by October 2020.
@Gene —
Fair assessment.
I work for united and it hurts me to hear people talk bad about the company tha I worked for 12 years I put my all in what I do. and am very grateful for united.. it hurts me to hear that we are goin under ect ect.. you know how many people work for United. u know how many peoples lives will be destroyed if they go under. people with mortgages. single mom or dad’s with kids. people taking care of there I’ll parents siblings. people putting their kids thru college ect. your hearing me, am sorry for your one or many bad experiences with United.. but just please keep in mind the good people of United..
Francisco, as a 1.4MM and 1K, I know there are so many wonderful people at United. I wish you all the best during this difficult time.
An AS customer service person is an “insider” for what’s happening at UA?
@Frank —
I would take the comment of someone who works for an airline over someone who merely blogs about it or posts comments on a blog with no cred.
The author has commented that he has not seen the memo himself. I can assure you there are incorrect facts he included in this post. I’ll leave it at that… I’ve seen the memo. No, I won’t disclose details.
Are you normally this daft? An Alaska Airlines CSR is an “insider?” How would that person have that information. Also, just based on the information from their last quarterly earnings call, they have enough cash in the bank to continue to burn their 40 million a day in today’s no revenue climate (plus payroll will be reduced significantly Oct 1) for about a year.
@ Jim —
Daft? That’s rich.
Please refer to my prior reply to your ignorant cousin Frank.
Yeah,Jim. How dare you?! I always find out about the executive-level decision making of McDonalds by checking with the cashiers of Wendy’s. Duhhhhhhb
Did she try to sell you a timeshare as well?
A flight attendant who works for another airline (probably has 5 years or less) becomes a credible source of information ?? Wishful thinking maybe but not someone I would believe at the drop of a hat.
Andre, are you that stupid! Since when is an employee from another airline ( and a reservations agent at that) an insider? She knows nothing about anything. Her airline is in peril of going bankrupt also. All rumors and speculation. United has 8 billion in the bank. Every airline is in very bad shape.
I think travel is going to recover faster than we expect. I think there’s huge latent demand, but people aren’t flying simply because of social pressure and lack of supply. This is a psychological issue more than a public health or economic issue.
Incorrect, status is only for Level 1 employees, aka vice president and managing directors. Level 2 and higher get no status.
Also its platinum status, not 1k
Thanks for the clarification.
250,000 miles? Wow, according to the award chart that’ll get you… oh wait.
Good point @Christian. The 250K is worth how much? vs. keeping 2/3’s of your pay for several months, especially when the employee still gets flight benefits. Then what is Platinum status worth these days? Not much IMHO other boarding group 1 and * Gold status.
Once again Kirby wants to save cash by treating the paying customers worse.
FYI – the details of this package consist of many options for someone to choose from. The 250,000 miles is not necessarily an automatic handout for someone taking a voluntary leave package. The author did not fact-check his information, so this post contains inaccurate information on several points.
Sad for you. Employees will fill up the first class cabin before loyal customers. Suckers. United is a terrible airline, hopefully Boeing ceo is right and they go out of business. AA and delta much better airlines.
Matt, what elite status’ do you currently hold?
1K
Rude
I’m an active employee, but just a few clarifications:
1K status is for Managing Directors who leave, not all employees. From internal notes, there are no further details on how long it would last. It’s a fairly small population that would qualify
Only those eligible for retirement would get retirement benefits after the 5 years. I would not be getting lifetime benefits… just the 5 years if I took the offer
“Full pay though June 30” is actually 80% pay as you still have to take the 1 unpaid day per week until June 30
Re-read your email, ORD787… it’s not 1k status, it’s Premier Platinum – and there’s a big difference in benefits between those two tiers, especially when it comes to upgrades.
Oops you are correct. I got caught up on the face that the post said ALL departures would be getting status and didnt even check what status level it actually was!
You need to (1) check your facts and (2) edit your clickbait headline and inaccurate content. The package is complex and full of a lot of specific detail and in your rush to publish, you’re “reporting” incorrectly.
The elite status is for Premier PLATINUM — and it is ONLY applicable to Managing Directors (aka “Level 1”). It is not applicable to Vice Presidents (they do not have a job “level”) or any other title.
The 250,000 miles is a benefit CHOICE of two options to be selected from. There is another option an eligible employee may select from instead of miles (no, I’m not disclosing details of the other travel-related option).
If you’re reporting on internal memos, GET YOUR FACTS STRAIGHT before you publish.
There was no rush to publish. Untied refused to comment and I could not obtain an actual copy, so I trusted Forbes. My mistake…
Will you be updating your post now that you’re not in a hurry? How about calling Corporate Comm and show them your “article” with incorrect facts? If they don’t talk to you, why not try to find another employee who is willing to show you the actual memo so you can report accurately? Or perhaps you could specify above that your information is UNCONFIRMED (despite several of us correcting you in the comments section here). If a journalist from a newspaper were to publish something like this, they’d check their facts. Where are your standards and ethics related to journalism? Oh wait, you’re *not* a journalist… my bad.
Yes, the post was updated with a screenshot of the memo…
Hopefully, there is probably plenty of small print with this offer. I’m pretty sure some “administrative” staff with less than 5-10 years with United is not going to be given 250,000 miles and retiree travel benefits at the end of the five years out of the company (unless they are very close to retirement age). And where does United get off giving “active” travel status to people who choose to leave and are no longer ACTIVE employees/ =contributors to United’s operation? Knowing United’s (too) liberal employee travel benefits, they will probably decide to throw in buddy passes and all the other 25 levels of “pass” travel eligibles that should never have “qualified” in the first place. Signed, UAL retiree.
Hello UAL Retiree – just a head’s up that all of the details of these packages are not confirmed nor are they 100% accurate. The writer of this post did not see the memo himself – and let me tell you it’s a complicated one to read with a lot of options, choices and details. There are a lot of inaccuracies in this article, so don’t believe everything you’ve read on this site.
Yikes. LOTS of inaccuracies with this. Would suggest a disclaimer at the top that you have not verified any of this personally.
Correct – lots of inaccurate info. He didn’t see an actual copy of the memo… he’s only writing about something that someone else wrote about…. isn’t there a child’s game about this, I think it’s called ‘telephone’ ?
Greetings Matthew
Great article but I got to tell you when I signed on with United, I was promised all kinds of great stuff after I retired: Paid Life Insurence policy, Unlimited passes based on my Hire date, (and that was boarding before all SA pass riders, based on seniority) Paid medical for me and my spouse for life. However along came 2001 and they took back the paid insurance policy, my wife is now only covered for medical until I die, and as for those passes, well we now have adjusted seniority that is adjusted downward annually and we get a limited amount of vacation passes per year, which you could lose if you didn’t use by a certain date. So, the promise is righteous but will it really be there when the dust settles? Based on United’s past practices, probably not.
Disenchanted
John – just a head’s up that every detail in this posting is UNCONFIRMED — some (not all) information is not 100% accurate. Unless you’ve seen that memo yourself, don’t believe everything posted on this page.
United Air Lines are two faced liars. Don’t be lulled into believing that they care about employees. The IAMAW is useless today. Thousands of employees lost their pensions in 2005 when Chapter 13 wasn’t needed to save the Airline. United with the help of corporate hatchet man Glen Tildon screwed everyone. United is a RAT.
Sounds like a bad deal for someone who doesn’t have a job waiting for them, much less the disposable income to enjoy said benefits. I hope the travel industry bounces back so that this is no longer an issue.
am retired xjt flight attendant. will i still retain my pass status after 9/30/2020
It depends upon your specific separation package.