UPS, the shipping company with its own fleet of aircraft, is offering its pilots early retirement buyouts in response to falling demand for air cargo services.
In a statement sent to FreightWaves, the company said that it regularly assesses its business and adjusts to ensure better service to customers, adding that “as part of our effort to efficiently manage our airline, we are offering a voluntary separation benefit to eligible UPS pilots”.
Aero Crew News has alleged that the company is offering a lump sum of $357,000 to its pilots.
UPS’ United States (US) Securities and Exchange Commission (SEC) filing for Q2 2023 showed that the average volume of daily packages was down 6.4% in H1 2023 as compared to H1 2022.
“In both [Q1 and Q2] periods, challenging external conditions, including persistent inflation, declines in U.S. manufacturing production and changes in consumer spending contributed to overall volume declines,” the SEC filing read. It added that, in Q2 2023, “volume was also negatively impacted by uncertainty around the results of our labor negotiations with the Teamsters”.
However, UPS expected the “year-over-year decline in average daily volume to be lower in the second half than in the first half”, and hence for daily package volumes to increase in H2 2023.
In terms of international airfreight revenues, UPS said that it “decreased approximately $365 million for the quarter (down $785 million year to date) as customer demand remained weak, particularly on Asia export lanes, and capacity growth continued to outpace demand”.
“These factors drove down the rates we charge for services in both the quarter and year-to-date periods and we anticipate that they will continue to pressure rates through the second half of the year,” the company continued.