United Parcel Service Inc., Atlanta, plans to furlough as many as 100 pilots by the fall.
The furloughs, affecting up to 4 percent of its 2,500 pilots, are the first by UPS since it began its own airline in 1988. The company's air cargo operations, based in Louisville, KY, have 1,800 daily flights.
UPS said it mulled job cuts in its flight-crew ranks for several months and decided to furlough pilots after concluding that significant growth in air-shipment volume was unlikely anytime soon. UPS is not weighing additional furloughs or layoffs elsewhere in its operations.
U.S. next-day air deliveries grew 0.7 percent to about 1.2 million a day in the fourth quarter from a year earlier, but have declined in five of the past eight quarters.
The decision also was based on more modern aircraft in the fleet requiring two pilots while older aircraft needed three, UPS spokesman Mark Giuffre said.
According to the Independent Pilots Association, UPS mailed a 30-day notice last week to 19 pilots who may be furloughed. Another 81 could be furloughed by September.
Giuffre said the company hopes to avoid some of the anticipated furloughs by offering “voluntary separation plans” or leaves of absence.
The head of the union said shrinking the number of pilots could make it tougher for the airline to juggle likely expansion in Asia. And if the United States goes to war against Iraq, the firm could lose as many as 300 pilots that serve as military reservists.
UPS and the Independent Pilots Association, which represents more than 2,500 UPS pilots, have been negotiating since October 2002 on a new contract to replace the current pact that ends Dec. 31.
Giuffre said the layoffs are unrelated to the contract situation. But Bob Miller, a UPS captain and president of the association, said the news “is going to have an impact on the negotiations.”
Also yesterday, UPS announced that 3,300 Mail Boxes Etc. franchises across the country will be renamed The UPS Store. UPS said the change will let franchises lower prices for UPS air express, ground and international shipping service. The company has no plans to change the name of the 1,000 international Mail Boxes Etc. stores. UPS acquired Mail Boxes Etc. in 2001.
