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JetBlue Offers Employees “Opt Out” Packages To Cut Costs

by Staff

JetBlue is kind of in a pickle at the moment. The carrier’s partnership with American Airlines was blocked, and then its takeover of Spirit Airlines was blocked. JetBlue’s leadership now has the task of running the company as an independent airline, and that seems to be starting with trying to reduce costs.

JetBlue offers voluntary separation packages to employees

As reported by @xJonNYC, JetBlue is offering voluntary opt out packages to all of its non-union employees (so this excludes pilots and flight attendants). Frontline employees are being offered two weeks of pay per year of service, while management employees are being offered three weeks of pay per year of service. In both cases, pay is capped at 26 weeks.

On top of that, those who accept one of these packages can receive healthcare through April 30, 2024, plus travel privileges. Those who have been at the company for a long time can even potentially get lifetime travel privileges (your age plus years of service must add up to at least 55, and you must have been at the company at least 10 years).

Employees have until February 8, 2024, to express interest in this program, and then will work through the end of February 2024.

Here’s how the airline described this decision in a statement:

“We are aiming to reduce our fixed costs through voluntary measures by giving people who work in a number of corporate functions, in our airports, and in our customer support center the opportunity to leave JetBlue with a departing pay and benefits package.”

This isn’t a huge deal, but is interesting

JetBlue is simply offering employees a mutually beneficial opportunity, as there are no furloughs here. Rather, employees have the option of taking one of these packages if they’d like. This isn’t exactly the most generous opt out package we’ve seen from a company, but then again, if someone was thinking of leaving the company anyway, this is a good incentive to do so.

Currently it seems like the bigger US carriers are best positioned, and most of the smaller and regional players in the US are in a much worse situation (and JetBlue is in an especially tough spot, having just spent hundreds of millions of dollars on a failed takeover attempt).

Stepping back for a moment, it is interesting how the industry has been evolving since demand has recovered after the pandemic. Airlines went on a huge hiring spree for a couple of years, and seemed like they couldn’t get enough employees.

Now even the best positioned airlines are saying that they’re planning on keeping their employee count roughly even over the coming years. I’d even view that as a best case scenario situation, as it assumes there’s no major headwind for the industry.

The US economy is in a good place, given what’s going on globally. But if anything shifts for the worse, you can bet that even the legacy carriers will be in big trouble.

JetBlue is looking to reduce fixed costs

Bottom line

JetBlue is offering its non-inflight teams opt out packages, in an effort to cut fixed costs. This is happening as JetBlue comes to terms with the reality of needing to focus on its own operation, rather than being distracted with partnerships and acquisitions. JetBlue management has quite a bit of work to do, and I don’t envy the job of JetBlue’s new CEO.

What do you make of JetBlue’s voluntary separation packages?

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