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United Offers Just $100 Bonus for Employees Because of the 737MAX Grounding

United Offers Just $100 Bonus for Employees Because of the 737MAX Grounding

United Blames 737MAX Problems for Missing Performance Targets

Along with some pretty serious weather events that have hampered United’s operations at its hubs in Chicago and Denver earlier this year, the airline has also blamed the worldwide grounding of Boeing 737MAX aircraft for missing this quarter’s operational performance incentive goals.  A leaked memo from United’s president, Scott Kirby tells staffers that this would ordinarily “result in eligible employees not receiving a bonus payment.”

“But, we worked through truly unique conditions and I believe your outstanding effort deserves extra — and tangible — recognition,” Kirby tells the airline’s 88,000 worldwide employees.

“That’s why we will be issuing a one-time $100 employee appreciation payment to all eligible employees on April 17.” – Don’t spend it all at once.

United has 16 Boeing 737MAX 9’s which have been grounded since last month after the FAA issued an urgent notice following the downing of 737MAX jets belonging to Lion Air and Ethiopian Airlines.  The number of aircraft may only be small – out of a total of more than 1370 aircraft in the United fleet, the 737MAX’s make up a mere 1.17% – but it’s still caused significant disruption.

Kirby, however, believes United has done far better than American Airlines and Southwest in handling the fallout from the grounding.  He tells staffers in the memo that the “United team went above and beyond to protect the flights that our customers were booked on.”

“Most of our competitors around the world simply cancelled all or most of their MAX flights and booked the customers on other flights, which were often days or even a week out from the customers’ original flight.”

Photo Credit: United Airlines
Photo Credit: United Airlines

Kirby says United managed to minimise disruption by using larger widebody aircraft like the Boeing 777 and 787 Dreamliner on several MAX routes.  But that has come at a cost, especially with all that extra capacity which is hard to fill at the last minute.  Kirby warns that the airline “can’t keep this up forever.”

The weather hasn’t helped United’s operational performance either.  Winter storms at United’s hub at Chicago O’Hare led to the cancellation of hundreds of flights, while Denver Airport where United also has a big presence was forced to close all four of its runways and cancel around 1,400 flights after a snow blizzard hit the city in March – it was only the fourth time in the airport’s history that it had to suspend its entire operation.

And let’s not forget the record 35-day partial government shutdown that disproportionately hit air travel.

It’s not clear what United’s employees think about this monetary gesture – obviously, it’s a lot better than nothing but it’s hardly generous either.

In March last year, Kirby angered flight attendants when he announced a plan to replace quarterly performance and attendance bonuses with a lottery.

The Score Rewards programme would have seen one random staffer awarded a $100,000 cash prize each quarter.  10 employees would win a $40,000 Mercedes C Class and 20 more would receive a $20,000 payout.  The smallest prize of $2,000 cash would be doled out to 1,000 staff members.

The idea was quickly dropped, with Kirby telling flight attendants that he had “listened carefully to the feedback and concerns you’ve expressed.”

Unlike a number of other U.S.-based airlines, United did not reward staffers following a change in tax legislation for big corporations that was passed by the Trump Administration.  Staffers at American, Southwest and jetBlue all received one-time payments of $1,00o to celebrate the change last January.

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