United’s 13,047 ALPA pilots have reached an agreement with United Airlines, unanimously ratifying its negotiated early-out Pilot Voluntary Separation (P-VSL) and other Programs.
The Pilot Union-negotiated programs were instigated to help the United pilots and United Airlines reduce the number of pilot furloughs. This is a result of the massive negative impact the coronavirus crisis currently has on the airline industry.
Pilots from other airlines already have similar programs in place, which you can read about here.
The United pilots separation (early-out) program
Source: Chen Aviation Consulting.
The agreement has provisions for pilots 62 and older to separate early from United Airlines. At the same time, the pilots will be retaining their benefits and a large portion of average line pay.
In the event of bankruptcy, the pilots’ early-out benefits are protected as much as other contract protections. Pilots under this program are considered United employees earning wages and not just unsecured creditors in the event of bankruptcy. This is the case even though they will technically be pilots out on early retirement. Thus, the P-VSL was designed as leave as opposed to retirement.
Pilots awarded a P-VSL must acknowledge that this award is irrevocable. Neither individual pilots nor the Company can change their mind at a later date.
P-VSL Leave Status versus Separation
Pilots awarded a P-VSL remain on a leave status until their 65th birthday. By keeping them as employees, pilots can continue to receive B and C pension contributions, which would not be allowed if they had separated.
Pilots are permitted to separate sooner than age 65 if they choose but the monthly payments and active rate insurance would end at that time.
The eligibility and award-process of the United pilots separation program (P-VSL)
This program is open to pilots age 62 or older as of August 28, 2020. The pilot must have at least 10 years of service with United.
All pilots age 63 and older are guaranteed to be awarded a P-VSL regardless of their *Category or the number of bidders.
On a Category basis, the Company will decide whether to award additional P-VSL to pilots with 25-months to 36-months remaining until age 65.
Once the Company knows how many they are required to award in each Category (24-months or less until age 65), they will determine if they can award additional P-VSL to pilots age 62-63.
*Category refers to the type of airplane the pilot is currently staffed on.
Highlights of the early-out separation program for United pilots
Start of the P-VSL
The program will begin with the September 2020 bid period. An exception is: unless the number of awards causes manpower issues for a particular Category. In that case, the Company may delay a Pilot’s start by up to three bid periods.
The separation agreement guarantees pay at 50 hours per month, based on the pilot’s current pay scale. 16% B and C Pension Plan contributions will be provided on top of the 50 hours of pay. The hourly rate used is the pilot’s rate of pay in effect when bidding opens.
Vacation and sick leave
Pilots on a P-VSL do not accrue vacation or sick leave. Pilots will, however, be paid for all accrued and unused vacation at the time the P-VSL begins. (Pay includes B/C fund pension contributions).
Pilots may continue in United pilot insurance options (health, dental, vision, and life) as if they were active pilots and will pay active pilot rate premiums until age 65. To qualify, the age of the separating pilot must be age 62+ (as of August 28, 2020) and 10+ years of service. Pilots age 63+ are guaranteed to be awarded the insurance premiums with no additional conditions attached.
Pilot Long Term Disability (LTD) Benefits
The P-VSL is Not open to pilots who are currently on Long Term Disability (loss of FAA medical certification).
Company paid move will be provided anywhere in Continental U.S.A. (including Hawaii as an option for Guam), up to a certain weight of goods to be moved.
250,000 United MileagePlus miles or 16 one-way positive space passes. Pass Travel carries the same rules as an active employee. For example, a higher priority than retiree travel and access to Zonal Employee Discount (*ZED) travel. Regular retiree non-rev benefits will set in at normal retirement age (age 65).
*170 different airlines worldwide participate in ZED travel benefits for airline employees.
United Airlines ALPA-negotiated pilot leave of absence programs
In addition to early-outs, United ALPA pilots have negotiated a variety of further programs. The programs have been designed to expand on solutions to reducing potential furloughs as a result of the coronavirus crisis.
These additional programs are not permanent early-outs. Instead, they are voluntary and involuntary leaves and furloughs, each carrying specific rules for return to active pilot duty rights.
Featured Image: United Airlines Boeing 757. Photo by JJ, for CaptainJetson.com.