US Airlines Are Trying To Avoid Layoffs With Early Retirement Offers

Three of the largest United States airlines are introducing new voluntary leave and early retirement programs to avoid…

US Airlines Are Trying To Avoid Layoffs With Early Retirement Offers

Three of the largest United States airlines are introducing new voluntary leave and early retirement programs to avoid having to layoff more staff. As the impact of the virus continues to cause financial stress, Delta Air Lines, American Airlines, and United Airlines have announced new measures to try to avoid the need to furlough more staff in the fall. This week, the three airlines have said that a total of 100,000 employees have already accepted voluntary leave packages.

Delta, American, and United are all trying to encourage early retirement. Photo: Getty Images

Why airlines want to avoid furloughing staff

Airlines around the world are currently walking a very fine line. On the one side, the sudden drop in demand for travel means that keeping all staff on the payroll is very expensive. With very little cash coming in, paying staff salaries is tough, and several airlines have already gone bankrupt. On the other hand, when restrictions lift and travel demand rises, airlines need enough staff to recover fast.

Airlines need to balance how many staff they keep and how many staff are furloughed. The three biggest US airlines have all introduced new programs this week to help retain key staff numbers high without furloughing too many staff permanently. An additional consideration for US airlines is that the terms of the CARES act proving loans to airlines says they cannot force staff to take job or pay cuts until October.

Delta’s retirement package

In response to the restrictions placed on them by the CARES act and the need to retain staff for recovery, Delta is offering an improved retirement package. Long-term employees who choose to retire early will receive a severance pay-out as well as health care and travel benefits. Delta’s CEO Ed Bastain tried to encourage staff to take up the offer by saying in a memo,

Every voluntary departure helps to protect the jobs of those who most need them.”

American Airlines has said it will operate a smaller fleet for the foreseeable future as aircraft retirement schedules escalate. Photo: Getty Images

Delta is also looking to retire some of its aging fleet. Obviously, fewer aircraft require less staff, and unions are preparing for a mass cull after the CARES act deadline passes. If not enough people take up Delta’s offer, October 1st could see a vast number of job cuts. Delta has said that those who take up the retirement offer will likely finish work on August 1st, giving the airline two months to make some very crucial decisions.

American Airlines plans for a smaller operation

American Airlines has this week joined Delta is trying to prepare staff for future cuts. Earlier this week, American said it would likely have to cut administration and management roles by 30%. This is no surprise as the airline is looking to retire around 100 aircraft and therefore needs to make necessary cuts.

The key to American’s plan is to thin out office staff while retaining pilots and cabin crew as long as possible. This means that when the industry starts to show signs of recovery, American will have the necessary staff to open up routes quickly. However, with fewer aircraft, they need fewer pilots. American is in discussion with pilots’ unions to talk about voluntary leave and retirement options for pilots.

The number of people canceling flights has decreased. However, there are no real signs of recovery just yet.  Photo: Getty Images

Plans to bounce back

Many hoping that we would experience a sudden boom in travel are now losing hope. It is widely accepted that it will take several years for the aviation industry to recover. United CEO Scott Kirby confirmed at a conference on Thursday that they believe a “bounce-back is almost impossible.” As such, Kirby confirmed that the airline was looking to survive and not thrive right now. United is in talks with unions to encourage more employees to take up voluntary leave options.

There are no real signs of recovery just yet other than the rate of cancellations slowing. If a sudden upswing in bookings is not expected, then we will likely see more furloughs coming in the fall.

Do you think the airlines will have to make more cuts after the CARES deadline passes? Are voluntary options appealing enough to get enough staff to take up the offer? Let us know your thoughts in the comments.

Source : Simple Flying More   

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Could Boeing Be Close To Ending 747 Production?

It is not just individual commercial passenger Boeing 747s that one by one enter early retirement as their…

Could Boeing Be Close To Ending 747 Production?

It is not just individual commercial passenger Boeing 747s that one by one enter early retirement as their respective airlines capitulate parts of their fleet to the pressures of the pandemic. Now, it would seem the very production of the iconic model hangs in the balance as Boeing debates whether or not to secure a new supplier for its parts.

Could Boeing end the production of the iconic 747? Photo: Getty Images

Boeing is facing a difficult decision over its iconic 747 program. While the last passenger 747-8 rolled out of the factory in 2017, with 47 aircraft delivered, Boeing has still been producing its freighter variant, the 747-8F.

Two years to fulfill commitments

Now, as the supplier of parts for the Queen of the Skies since her inauguration program over half a century ago has cut supplies, the manufacturer is faced with a choice. Either it establishes a new supply line, or it wraps up 747 productions for good. Boeing is thus far keeping mum on future plans, but had this to say on its current commitments,

“The 747-8 is sold out for the next few years. At a build rate of .5 airplanes per month, the 747-8 program has more than two years of production ahead of it in order to fulfill our current customer commitments. We will continue to make the right decisions to keep the production line healthy and meet customer needs,” a spokesperson told Simple Flying.

Future of Boeing 747 program
UPS is waiting to take delivery of another 13 747-8F throughout the next two years. Photo: Getty Images

Enough supplies to complete backlog

For 50 years, a company called Triumph has supplied fuselage and tailplane panels for Boeing’s 747. Earlier this year, Triumph said it had delivered its very last of these parts as it shut down its plants in Texas and California. Before closing up shop, it supplied Boeing with enough to complete the existing order backlog. However, if future production will continue, the manufacturer needs to seek out a new supplier.

UPS waiting for 13

According to FlightGlobal, there is increasing internal tension at Boeing over the fate of the iconic aircraft program. Sources say that the company has determined a minimum number of orders needed to commit to a new supply-line and extend production. The figure is believed to be close to 100 aircraft.

The last commitments for the 747F came in 2018. UPS, the American multinational package delivery service, ordered 14 of the aircraft. UPS is also Boeing’s largest 747F customers, having signed for 28 in total over the years.

Volga Dnepr, a Russian cargo airline, specializing in moving oversized, unique, and heavy cargo, ordered four the same year.

Qantas 747
If the production of the 747F stops, it will mean the end of the program. Photo: Qantas

Truly the end of an era

Many have been saddened to see the classic silhouette of the 747 move on to greener pastures. While the demise of its freighter program may not be tugging quite so bad at the heart-strings, should Boeing decide to end production, it will most definitely be the end of an era.

It would also leave cargo carriers with a gap in the availability of newly built, large-capacity freighters. At 138t, it has a higher payload than the closest civil freighter, the 777F at 102t.

Granted the upswing in global air cargo demand, while not exactly proportional to the drop in passenger travel demand, could there be a renewed interest in the 747F? Although, there are quite a few converted passenger jets that could be vying for cargo-only spots as commercial airlines downsize their fleets.

What do you think, will we see the final of the 747 family roll out of the factory in two years, or does it still make sense for Boeing to keep up production? Let us know your thoughts in the comments.

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