Can elite status and frequent flyer miles be an incentive for airline employees to accept a voluntary separation package? United Airlines seems to think so.
In this post:
United Airlines aggressively cutting workforce
United Airlines has been by far the most aggressive of the “big three” US airlines when it comes to making it clear that layoffs are imminent. While the situation is obviously terrible right now, the contrast between the messaging at American and United has been interesting (in the meantime American has also revealed plans to lay off 30% of management staff).
With the government funding that United Airlines received through the CARES Act, the company can’t lay off any employees prior to October 1, 2020. However, the airline can incentivize employees to accept a voluntary separation package. Along those lines, the airline has just made an interesting offer to management & administration (M&A) employees.
United Airlines is planning huge workforce cuts
United offers status & miles to employees
United Airlines is hoping to reduce their M&A headcount by about 30% in the coming months, given the current situation.
According to a memo, United Airlines is offering an interesting voluntary separation package to these employees. While the exact packages differ by role, the basic terms for many employees who accept a voluntary separation package would be as follows:
- Employees would stop working in June, but would be considered employed until December 1, 2020
- Employees would receive full pay through June 30, 2020, and then 33% pay between July 1 and November 30, 2020
- Healthcare benefits would still be valid through November 30, 2020
All of that seems like a pretty standard voluntary separation package. What is interesting is the travel benefits they’ll give to those who employees accept a voluntary separation package:
- 250,000 MileagePlus miles (I value those miles at ~1.4 cents each, so to me that’s worth about $3,500), or the option of 12 one-way positive space leisure travel passes (these are employee travel benefits that can be confirmed in advance, rather than being on a space available basis)
- Active travel benefits for five years (meaning you’d have high priority when traveling on a space available basis) and then retiree travel benefits after those five years (so you’d still get benefits, but just lower priority)
- For managing directors and above, United is offering Premier 1K status, which is United’s top status tier with published qualification requirements (it’s not known how long the status will last)
Could travel perks cause people to accept a voluntary separation package?
Bottom line
This is an interesting offer from United. I know in the past the airline has sometimes offered management employees miles as an incentive, so I’m curious how much this moves the needle for some employees.
Not only are they offering space available travel benefits for an extended period, but they’re also offering MileagePlus miles, and for some senior executives they’re offering status.
On the one hand, employees who accept a voluntary separation package will have a lot of time to travel. On the other hand, many may not have the resources to travel without a job — even if flights don’t cost anything, travel still isn’t free.
For some this will likely come down to whether they expect they’d be laid off come October 1 otherwise if they don’t accept the voluntary separation package. For those people it could be worth leaving a few months earlier and picking up lifetime travel perks and more.
We took the VS1 Separation package. Which includes frozen active seniority for 5 yrs. As we understood, our seniority date of hire would remain the same along with active travel status for 5 yrs. Is anyone else having issues with this. I am still on active travel status, but my seniority date has dropped 2 years. I should be 1977 status until 2025.
Please respond back to my email
Thanks
Ronnie
Be careful of the proposed benefits. I took an early retirement from TWA in the 90’s, which included lifetime passes. The AA takeover of TWA wasn’t even a week old when I received my letter that all my promised TWA benefits, including my lifetime space available passes were no longer applicable. Nothing is forever
No one is hating on airline employees. What simply is being stated is that the conveniences and services while flying is being lowered daily. That includes the benefit of elite membership. In short we pay to fly while (and rightfully so) airline employees get PAID to fly. Different expectations. No one wants the industry to shrink nor people to lose jobs! But let's be VERY real. While the cost of UA elite qualifications has gone...
No one is hating on airline employees. What simply is being stated is that the conveniences and services while flying is being lowered daily. That includes the benefit of elite membership. In short we pay to fly while (and rightfully so) airline employees get PAID to fly. Different expectations. No one wants the industry to shrink nor people to lose jobs! But let's be VERY real. While the cost of UA elite qualifications has gone up substantially the quality of the product has not. Far from it and especially in the air. And while you have thousands of dedicated staff at the carrier, you also have those that show up to serve their time. I know so because they've confided as much. And THAT does not serve travelers or UA well. If I pay $8,000 for a suite at a top hotel in the world for ONE night what sort of service could or should I expect? Probably a pretty high standard. Why does that not carry forward even to a slight degree to air travel? Please don't say safety.
Also another correction: 1K isn't being offered to Managing Directors... Only Premier Platinum for them. and it's a very small amount of the population that would qualify; something like 300 to 400 out of 90,000
Definitely don't take the miles. That's a bad deal.
First and foremost, the article does not accurately describe what is actually being offered to UA’s M & A staff. Second, have some empathy for the approximately 100,000 UA employees who WORK very hard and are now facing the possibilities of work/pay reductions or permanent separation.
Whether you like the company or not, it Is a JOB that puts food on the table for many families.
@Truth
Are you high?
In which post that makes you think this?
"What irritates me the MOST is you guys always hate on airline employees news flash people getting to fly for FREE is a BENEFIT of working for an airline so if that privilege is going to piss you off grow the up and cry me a river babe."
Is this some Union talking? :)
It’s funny how everyone on here has a hate remark! First of all Lucky you might want to fire your source cause this is not accurate... Next shame on al you fools who believe this load of BS( is the internet always factual) your getting your panties all in a knot for no damn reason. What irritates me the MOST is you guys always hate on airline employees news flash people getting to fly for...
It’s funny how everyone on here has a hate remark! First of all Lucky you might want to fire your source cause this is not accurate... Next shame on al you fools who believe this load of BS( is the internet always factual) your getting your panties all in a knot for no damn reason. What irritates me the MOST is you guys always hate on airline employees news flash people getting to fly for FREE is a BENEFIT of working for an airline so if that privilege is going to piss you off grow the up and cry me a river babe. For example you don’t go to target and get mad that the Target employee in front of you at the check out gets a 20% discount do you ? Why ? Because that’s their benefits for working for Target right ? Same song just a different tune. If you want any benefits then go work for that company simple as that !
For all of the bashers, UA is doing all it can to save the company. If you have as many miles on them as I do, you really hope a lot of their M&A staff take this. You also hope that a lot of the the old battle axe FAs and CS people take it too. That airline needs some new blood that is focused on the customer.
As VR voluntary redundancy packages go I dont find it to be much of an incentive. If it was a cash amount calculated on a percentage of years of service then it may be ok but who knows what the future holds for employee travel - - they could turn around at any time and just reduce benefits - so it wouldn’t be attractive to me AND it’s United
@Robin,
It looks like United is going to fold?
UA is burning less cash per day than both DL and AA. They are certainly in a much better position to come out the other side of this than AA. I’d say use up those AAdvantage miles.
@Stanley,
Wait! You’re calling DL and UA substandard as compared to AA?!
Anyway, there will be a lot less oneworld flights to choose from when AA goes belly up. Good luck using up those AAvantage miles before they do.
So now I'm addition to competing for upgrades with our 1Ks we get to compete with an additional volume of many thousands I'm a much less restrictive route network. Whoever is leading UA's crisis management is absolutely clueless.
Some of the terms you stated are inaccurate and misrepresented. Also, for those that are bashing United, the company is trying it's best not to layoff M&A employees involuntarily as involuntary layoffs will get nothing.
Lucky, honestly...this is really a very poor synopsis of the offers, which are different for different levels of M&A and involve multi-faceted choices, some of which are here and some that aren't. You either didn't read through the material or your source failed you. Either way, it's not your best work.
Not correctly reported. The ONLY people that get status are their high level employees, Managing Director or higher. So no, not every employee will get this status offer.
ALSO, you only get retiree travel benefits if you are retiree eligible at the time of separation, which would be November 30,2020.
May what it check your facts and sources before writing this article as this is completely false. I work there and this is not what came out in the memo.
Please let all know that the PACKAGE UAL is offering leaves out all employees that
are on an extended illness status. 28 years and because I am ill I am being left out
Thank you United
United isn’t saying all this to be transparent. They are doing that as a scare tactic to get people to take leave. All airlines have been saying they will be smaller. They have all said there could be furloughs.
Instead of going straight to cutting employees. Why not work with employees to come with creative ways to save money.
Yikes! Lots of inaccuracies in this. Should probably be including a disclaimer that you haven’t personally fact checked any of this.
The value of the 1K status is just under $10,000.00 per a post on another site. In the past 3 years the COST of 1K has gone $6,000.00 not including the other cost involved in travel. I am purely a leisure traveler. To have worked and maintained 1K status for the past 3 years, handing it out as a early retirement settlement is a big FU!
I had an email exchange with the Managing Director of MP in 2018.
"I worry a little bit that offering a discount on the PQD thresholds may not help United recognize and award our top tier members."
So, what has changed? I kept my receipts of the convo!
If I were an airline employee, I'd be enticed by the retiree travel benefits, especially if that offer package includes immediate family. I would think that United and Delta would make it out of this before American, just looking at the company's financials. United is showing leadership by making drastic cuts early to enhance their odds of a sustainable future.
Looks like United is going to fold so perhaps best to use any miles on non United metal (preferably a national flagship carrier like Air Canada who will be propped up by their respective governments??) now so you have a chance of keeping the ticket when they do? Else miles and all these employee perks will be useless...wish I could be more optimistic but Buffett has dumped airline stock and Boeing CEO said one will...
Looks like United is going to fold so perhaps best to use any miles on non United metal (preferably a national flagship carrier like Air Canada who will be propped up by their respective governments??) now so you have a chance of keeping the ticket when they do? Else miles and all these employee perks will be useless...wish I could be more optimistic but Buffett has dumped airline stock and Boeing CEO said one will fold. Now looks like it will be UA being so desperate...
@Eskimo, ha, Oscar, and all officers get lifetime positive space leisure benefits...I think they also get GS status, but who really cares, the status is irrelevant when you’re booking upfront for free for the rest of your life.
I also disagree about the value or ability to use travel benefits. Employees use these all the time to take trips, often international up front, and if they’re playing the credit card game like most of...
@Eskimo, ha, Oscar, and all officers get lifetime positive space leisure benefits...I think they also get GS status, but who really cares, the status is irrelevant when you’re booking upfront for free for the rest of your life.
I also disagree about the value or ability to use travel benefits. Employees use these all the time to take trips, often international up front, and if they’re playing the credit card game like most of us, their hotels are free too. While I agree that travel costs money, so does a weekend in a major city here in the US
1K and miles... when do you think you will get to use them? United may be gone before the pandemic. LOL.
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...
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
This information is incorrect. It's not the offer on the table. Fact check before posting.
For all of those who are bashing United, I believe they're showing leadership here. If I were an employee, I'd rather have a clear, transparent picture from my management in advance. This will give me time to more adequately plan for the future.
On the other hand, American and Delta telling their employees that everything is fine is disingenuous. All one has to do is 1 - look at the current and future travel booking...
For all of those who are bashing United, I believe they're showing leadership here. If I were an employee, I'd rather have a clear, transparent picture from my management in advance. This will give me time to more adequately plan for the future.
On the other hand, American and Delta telling their employees that everything is fine is disingenuous. All one has to do is 1 - look at the current and future travel booking data, 2 - look at the likelihood (or lack thereof) of a vaccine within the next few months and 3 - follow overall economic data which shows prolonged high unemployment and changing personal and business approaches to travel (e.g., more road trips, more usage of video conferencing vs in person meetings). It is clear that this is a very dark time for the airline industry and is about to get a lot worse. United seems to be the only major US carrier to be accurately reflecting this in their messaging.
Opt into 5 months of 33% pay instead of 3 months of 100% pay to receive peanuts in miles, one extra month of health insurance, plus some vague future benefit for traveling with them?
Seems a pretty bad deal to me.
@Bob
How much did Oscar get, lifetime positive space and 1K?
Even if this deal is not just for Managing Directors, I would say only MD could really reap value in travel privileges. I would think to most airline employees they don't use it that much as cost of airfare is just part of the trip other costs are still there.
No, there is no stipulation for 1k. It's either 250k miles or 12 one way positive space tickets. Those with 20 years of service and 45 or older ALREADY have lifetime travel benefits. The offer is a joke to the employees.
This should be fact checked better before posting. First, no employee is getting 1K status out of this, Managing Directors (less than 400 total at the company) would get Platinum status for the 5 years of active duty privileges...and that’s if they were all to leave...they won’t, you’re probably talking about 20-30ppl total that take this voluntary package. The rest of M&A get no status privileges just space available travel.
It’s funny when I...
This should be fact checked better before posting. First, no employee is getting 1K status out of this, Managing Directors (less than 400 total at the company) would get Platinum status for the 5 years of active duty privileges...and that’s if they were all to leave...they won’t, you’re probably talking about 20-30ppl total that take this voluntary package. The rest of M&A get no status privileges just space available travel.
It’s funny when I hear ppl complain about offers like these, not offering full pay or large lump sums to walk away...there is NO money to be given away...this is actually a pretty solid offer especially if you value travel privileges which is key to most airline employees. Also, there are no non compete or restrictions to ppl getting jobs elsewhere and in fact they could come back to UA in the next five years and retain their seniority date. The alternative is to simply be let go October 1st with nothing, so keep that in mind.
Disclosure, I’m a UA Global Services customer and have two very close friends who work in upper management and we’ve discussed these offers in detail over the past couple of days.
Agree with ORD-Not Jeff. American did the same thing. Accept early retirement and you will continue with D2 pass travel. Parker came from US Air and nullify the that promised travel benefit.
Hahaha. Shows how much united cares about its loyal customer. It’s employees will clear before high paying customers with platinum
And then UA declare bankruptcy 6 mos. later and nullify those perks. No thanks.
My first question is if someone accepts this and receives full pay for a while then partial pay (plus the above mentioned benefits) does this preclude them from working another job? I suppose if they were able to be employed (even at a lesser job initially) they would come out ahead for a while. At least until December 1. Given these are non-technical jobs (I assume) white collar as opposed to air crew and mechanics...
My first question is if someone accepts this and receives full pay for a while then partial pay (plus the above mentioned benefits) does this preclude them from working another job? I suppose if they were able to be employed (even at a lesser job initially) they would come out ahead for a while. At least until December 1. Given these are non-technical jobs (I assume) white collar as opposed to air crew and mechanics they probably have skill sets that would transfer to other industries.
No mention of how many PlusPoints they get (if at all)
1K status for how long @Lucky .... sure that won't fly with many of us, who have had to pay higher fares and do almost twice the amount to achieve that status ...
By the way giving 1k status doesn't cost the company anything ...
Unless the employee was on the bottom of the list or sure there was no doubt that a furlough and possible total separation was imminent. I don't believe this is a fair offer. As @Lucky states, free airfare does not make travel free. And 250K with UAL's redemption rates are useless IMO.
Lifetime flight benefits?
Sold to mid-level and above corporate positions.
The rest include agents and crews, not so much.
Even as an active employee, you'll be surprised how little these group of people use flight benefits.
But credits to UA for being creative.
@Cbchicago Most international clubs restrict non-revenue stand-by fliers regardless of status. *A clubs require a paid or a mileage redemption ticket.
@Stanley, never understood why people troll travel blogs like Lucky's when there are plenty of sub-reddits to choose from.
Did United think about all of the new Star Gold 1k that will be in the clubs while flying on their lifetime standby tickets? Just saying lifetime UA club member here that cannot even get into the club when flying a non star flight.
Is the 1K status for life? If so, that’s a pretty good deal.
Never understood why people fly sub-standard airlines like United or Delta when there are plenty of top oneworld airlines to choose from.