Two weeks ago American was asking flight attendants to take leave with no pay. Unsurprisingly they didn’t have enough takers. Pilots, however, could take leave or early retirement at about two-thirds pay.
American is now offering paid early retirement and paid leave across the company, not just for pilots, though of course the leave options aren’t as generous as what pilots receive. Here’s what temporary leave looks like:
- Frontline employees can take 3, 6, 9 or 12 months of leave
- Management and support staff can take 3 or 6 months of leave (or 1 month unpaid, or 3 and 4 day work week schedules with reduced salary)
- Paid leave is at 25% compensation plus full benefits
American is also offering early retirement (‘early out’) at 50% pay for a year plus 30 months of benefits (including 18 months of company-paid COBRA benefits). Frontline employees with 10 years of service are eligible, and management and support staff with 10 years and whose age plus years of service equals 65 are eligible.
According to American’s internal documents, “[t]he deadline to apply is Friday, April 3, at 11:59 p.m. CT.”
These options are all voluntary, and an improvement over the original flight attendant offer. The leave options are designed to conserve cash, and the ‘early outs’ to downsize the airline without furloughs for a future, after government bailout cash runs out, where the airline – and all airlines – are smaller.
The cash buy out amounts for 10 year flight attendants, for instance, won’t be very high but they’ll be looking at their seniority numbers to see how they’d fare if facing layoffs come the fall. For more senior and highly compensated employees the payments are more generous, but job security is greater.