Airline launches new employee exit deals with pay

CHICAGO: United Airlines has offered employees fresh deals with pay and health benefits to leave the company or retire, according to a memo seen by Reuters, part of a drive to reduce headcount and cut costs as it awaits a rebound in pandemic-hit travel demand.

Asked about the offering, a United spokeswoman said: “Given the continued, near-term variations in travel demand, we’ll look for new ways to give our employees flexibility by introducing voluntary options that help reduce costs and may reduce the number of furloughs of recalled employees.”

On Wednesday, the Chicago-based airline said it aimed to cut about $2 billion of annual costs through 2023.

United furloughed thousands of employees last October when an initial round of payroll aid for airlines expired. It brought back those workers following a fresh $15 billion in payroll aid for the sector but warned the recall could be “temporary” as travel demand remains depressed.

United has the greatest exposure of major U.S. airlines to international travel, the sector hardest hit by the pandemic and the one likely to be the slowest to recover.

Airlines are counting on COVID-19 vaccines to boost travel demand later this year but warn that the strength of a rebound will largely depend on the pace of vaccine rollouts, particularly as coronavirus cases keep rising.