The national air carrier Czech Airlines intended to dismiss up to 200 people if employees did not accept a wage cut. The company has already informed the Labour Office about potential mass redundancies. At present, Czech Airlines employs about 4,700 people and, based on the information of the Czech News Agency, the average monthly wage across the company amounts to CZK 59,000 (about € 2,311). However, pilots have finally agreed to a 6.5% wage cut in order to save jobs.
Threat of dismissals failing agreement on wage cuts
Czech Airlines (České aerolinie, a.s., ČSA) has informed the Labour Office (Úřad práce, ÚP) about potential mass redundancies of up to 200 employees from the current 4,700-strong workforce. With this move, the company fulfilled its statutory duty in case such a dismissal were to occur – that is, if no agreement between the airline and the trade union were reached with regard to reducing wages to the same level as at the end of 2008. This would mean agreeing on a wage cut of 6.5%. At present, based on information from the Czech News Agency (Česká tisková kancelář, ČTK), the average monthly wage in the company amounts to CZK 59,000 (about €2,311 as at 30 July 2009). The company management plans to save about CZK 300 million (about €11.75 million) in 2009 as a result of this wage reduction; however, a direct reduction of wages is blocked by the three-year collective agreement currently in place, ensuring for 2009 a wage increase by one percentage point above the inflation level – which stood at 1.2 % in June 2009.
Economic crisis affects national airline
Most airlines have been affected by the global economic crisis, and ČSA is no exception to experiencing a decline in activity. According to the ČSA President, Radomír Lašák, the company could come out of the crisis still in a relatively good financial position. He stated: ‘This year the number of passengers has dropped so far by about 11%, in recent weeks we began to address the decline in percentage units.’ Some sources, however, reveal that the company had drawn up a financial analysis already at the beginning of this year, implying that if the current economic crisis continues, in the autumn of 2009 ČSA may have a problem with its operational financing. As a result, ČSA received financial assistance from the state in the form of a loan to the value of CZK 2.5 billion (€97.96 million). In this regard, Mr Lašák noted: ‘This is to prepare for risks, we are not in direct need of money. This is not an enforced solution, only a preparation for worse times ahead.’ Nevertheless, the airline’s financial recovery, including a reduction of the company’s wage costs, coincides with the privatisation of the company, which is currently being prepared by the Czech government.
Discussions on wage cuts
The trade unions and the ČSA management have been discussing the issue of a wage cut for a number of weeks to reduce labour costs at the airline. The willingness to accept lower wages was shown first by the Czech Airline Aircrafts Engineers (Profesní odborová organizace leteckých techniků a leteckých inženýrů, CAAE), while, however, criticising the employer’s plan to push through a permanent wage cut – that is, to maintain the lower wage level also after the economic crisis passes. On the contrary, the general meeting of the Trade Union of Aeromechanics (Odborová organizace leteckých mechaniků, OOLM) repeatedly rejected the employer’s requests – thus giving the ČSA management the excuse to reduce the headcount in this professional group of about 500 members by 28 people. Nevertheless, the decisive and crucial factor for the company should be the stance of the Czech Airline Pilots Association (České sdružení dopravních pilotů, CZALPA), since pilots’ salaries are markedly above the average in ČSA, totalling about CZK200,000 (€7,837) a month.
Pilots finally agree to wage cut
CZALPA was established in 1990 and is the only professional organisation in the Czech Republic representing airline pilots. Its objectives also include creating conditions for a development of their expert knowledge and skills, as well as cooperating with state institutions and international organisations representing airline pilots.
CZALPA investigated the opinions of its members via a questionnaire, in order to gauge pilots’ willingness to accept the reduced salaries and the acceptable amount of a potential reduction. In the end, ČSA pilots agreed to the reduction of their salaries by 6.5%. CZALPA stated in its declaration in this regard:
The professional and trade organisation CZALPA ČSA, uniting more than 500 pilots of ČSA, criticises steps taken by the airline’s management also in relation to their efforts to cope with the economic crisis. However, in order to help the company in these difficult economic times, CZALPA agrees with the reduction of the company wage costs.
Company success to date
Czech Airlines ranks among the prestigious European airlines, defending its title as the best central European airline in the World Airline Awards in 2009, which is held on an annual basis by the UK-based independent air transport research organisation Skytrax. Over the past 10 months, about 15 million airline passengers participated in the survey. In 2008, apart from the World Airline Awards, ČSA also won its category in the rating list Official Airline Guide, which is set up based on a poll of the expert public.
Jaroslav Hála, Research Institute for Labour and Social Affairs (RILSA)