JetBlue Proposes Early Retirement Benefits, Says Union

JetBlue Airways is proposing early retirement packages to select pilots as mentioned by their union recently.

This initiative forms part of the airline's strategies to cut down expenses and increase revenue, especially amid issues like an engine recall affecting some aircraft in their fleet.

According to a memo from the Air Line Pilots Association, which was reviewed by CNBC, the process of voluntary separation has commenced and is expected to conclude on February 7.

An agreement between JetBlue and the union details compensation where pilots receive payments equal to 55 hours of their hourly wage leading up to their required retirement date or 18 months from their leave, whichever is sooner. For instance, an Airbus A320 captain with 12 years of service, retiring at 65 in December 2027, stands to acquire $416,293.02, while an Embraer E190 captain with 8 years of experience, turning 65 this year, would be compensated $160,858.91.

There has been no immediate response from JetBlue regarding the announcement as they prepare to disclose their quarterly earnings on Tuesday.

The early retirement plan specifies eligibility for pilots who will be 59 or older by March 31. The U.S. sets the commercial airline pilots' mandatory retirement age at 65.