UPS Inc. is giving pilots money to retire early as a way to save money because the number of packages being sent is going down.
The combined mail and shipping giant said Thursday that it plans to eliminate top pilots a day after meeting with the pilot group.
UPS regularly assesses its operations and makes adjustments to serve its customers better. UPS has announced that they are offering a voluntary separation benefit to eligible UPS pilots as part of their efforts to manage their airline efficiently. Those who accept the offer will receive a comprehensive compensation package, including cash and healthcare benefits.
UPS needed to be more explicit about how the deal worked.
UPS’s efforts to reduce costs and increase efficiency
Morgan Stanley tracked UPS’s flights and found that their activity dropped by 14% in July compared to the month before and that their flight hours dropped by 13% compared to last year.
UPS said that its domestic next-day air income dropped by 9.4% during the second quarter, while its volume dropped by 12%. Management said a big reason for the drop in domestic sales was customers switching to UPS’s cheaper ground network.
UPS could speed up its two-day operation and cut block hours by changing how packages move in the United States. Block hours are the time spent on flights and at the airport. Because its nighttime trips are so popular, it has reduced the number of daily flights it has to run from its Worldport base in Louisville, Kentucky. As a result of the changes, says CFO Brian Newman, the number of domestic flight hours was cut by 6.5% compared to the 2022 quarter.
UPS’s efforts to modernize its fleet and reduce staff
UPS started getting rid of its fleet of MD-11 planes in January. In the next three years, 42 tri-jet freighters will be replaced by 28 brand-new Boeing 767 medium widebody airplanes. Six of these planes will arrive this year alone. The 767s are more reliable, cost less, and put out less pollution than their predecessors.
Louisville, K.Y. Ways to WDRB broke the news that UPS was trying to cut the number of people who worked on its freight plane. It was said that UPS is going to let go of 167 pilots.
As part of a plan to cut down on staff, UPS fired 109 pilots in 2010.
No one knows how many senior captains with decades of experience at UPS Airlines are qualified for the deal.
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