UPS Extends Buyout Offers to Pilots Amidst Dwindling Demand

UPS, the world’s largest package delivery company, has offered voluntary retirement packages to some of its pilots as it faces a weak air freight market and rising labor costs. The company said it has made the offer to about 2,500 pilots who are eligible to retire by the end of 2023.

The offer includes a lump-sum payment of $110,000, health insurance benefits until age 65, and travel benefits for life. The pilots have until October 12 to accept the offer, and can choose to retire anytime between January 1, 2022 and December 31, 2023.

UPS said the offer is part of its efforts to optimize its network and reduce costs amid the changing market conditions. The company said it expects the air freight demand to remain soft for the rest of the year, due to the impact of the Covid-19 pandemic, the global chip shortage, and the trade tensions between the US and China.

UPS also said it faces higher labor costs as it negotiates a new contract with its pilots’ union, which represents about 3,000 pilots. The current contract expires on December 31, 2021. The union has asked for higher wages, better working conditions, and more retirement benefits.

UPS said it will continue to hire new pilots to meet its operational needs and maintain its service quality. The company said it has hired more than 300 pilots since January 2020 and plans to hire another 300 by the end of this year.