Sometimes, business decisions are painful. This is the case as UPS Airlines begins furloughing pilots this week.
We understand the impact of furloughs on our employees and their families, which is why we spent the past year working exhaustively with the pilots’ union on voluntary alternatives to save jobs, such as short-and long-term leaves of absences and job sharing.
UPS is not a culture where job cuts are the norm. This pilot furlough is the first in our 22 years as an airline. Our thoughts go out to the crewmembers involved, as well as the 15 million Americans seeking work in this still-challenging economy.
Simply stated, we are undertaking this furlough because we have more crewmembers than we need to operate our airline.
- Due to permanent fleet retirements, we are flying 48 fewer aircraft than we used to.
- We are operating fewer flights as we continue to feel the impact of the recent recession.
- And the Federal Aviation Administration’s 2007 ruling that changed mandatory pilot retirement age from 60 to 65 has allowed many of our senior crewmembers to remain on the payroll.
We have absorbed quite a few pilots into our active fleet types, such as retraining about 100 former DC-8 crewmembers. At an average employment cost of $185,000, crewmember salaries are an expensive cost factor. In any economic condition, it’s tough to keep staff when the work is not available.
We remain in belt-tightening mode at UPS. Even though the economy has begun to recover, conditions remain fragile, and we still need to watch our costs. This pilot furlough is just one example of $1.4 billion in cuts – ranging from capital expenditure reductions to management salary freezes – that UPS has undertaken in the past year.
No one wanted this furlough, but it’s the decision we needed to make to sustain our business. We look forward to better days in the future, when business conditions improve to a level that will allow us to bring our crewmembers back into the UPS fold.
