JetBlue is currently in trouble. The company’s partnership with American Airlines was blocked, followed by its acquisition of Spirit Airlines. JetBlue’s management is now tasked with running the company as an independent airline, and that appears to be starting with an effort to cut costs.
JetBlue offers employees voluntary separation packages
According to reports @xJonNYC, JetBlue offers a voluntary opt-out package to all non-union employees (that is, pilots and flight attendants are excluded). Front-line employees will be provided with two weeks’ pay per year of work, and managers will be provided with three weeks’ pay per year of work. In both cases, the salary cap is 26 weeks.
In addition, those who accept one of these packages will receive medical coverage until April 30, 2024, as well as travel benefits. Those who have been with the company for a long time may also be able to earn lifetime travel privileges (must be at least 55 years of age plus years of service and have been with the company for at least 10 years).
Employees have until February 8, 2024 to express interest in the program and will then work until the end of February 2024.
The airline explained the decision in a statement:
“We are committed to reducing our fixed costs through voluntary measures by giving our employees the opportunity to leave JetBlue with their pay and benefits intact, working in various functions within the company, at our airports, and in our customer support centers. That’s what I’m aiming for.”
This isn’t a big deal, but it’s interesting
JetBlue doesn’t have furloughs, so it’s just providing a mutually beneficial opportunity for its employees. Rather, employees can choose any of these packages according to their preference. This isn’t the most generous opt-out package we’ve had from a company, but if someone is thinking of leaving the company anyway, this is a good incentive to do so.
Currently, the major U.S. airlines appear to be in the best position, and most of America’s smaller regional carriers are in an even worse position (and JetBlue has spent hundreds of millions of dollars on failing airlines). takeover attempts).
Stepping back for a moment, it’s interesting how the industry has evolved since demand rebounded post-pandemic. The airline went on a massive hiring spree for several years, but it seemed like it couldn’t find enough employees.
Even the best-positioned airlines now say they plan to keep their workforces roughly even over the next few years. I even consider this a best-case scenario situation, as it assumes there are no major headwinds in the industry.
Given what’s going on globally, the U.S. economy is in good shape. But if something goes wrong, even legacy carriers are sure to be in big trouble.
conclusion
JetBlue offers opt-out packages to non-flight teams to reduce fixed costs. This is happening as JetBlue accepts the reality that it needs to focus on its own operations, rather than getting distracted by partnerships and acquisitions. JetBlue’s management has quite a bit of work to do, but I don’t envy the job of JetBlue’s new CEO.
What do you think about JetBlue’s voluntary separation package?