State of the Unions
Airlines, Unions Negotiate Reductions in Force
- Southwest, as mentioned in the Weekly Skies section above, is not resorting to job cuts yet. CEO Gary Kelly said the carrier has drawn up plans for layoffs and furloughs, but it should not have to resort to them at least through the end of this year. The carrier offered employees voluntary separation and leaves-of-absence packages earlier this month, and almost 17k employees — 27% of the workforce — took them. About 4,400 opted to leave the company, and more than 12k opted for leaves of a year or more. This will allow Southwest to avoid the first layoffs in its history, Kelly said. The employees on leave can be recalled quickly, allowing Southwest to spool up rapidly if demand returns. But Kelly said the carrier’s forecasts predict demand will remain depressed through this year. With one-quarter fewer employees, Southwest will have 25% less capacity this year.
- More than 2,000 easyJet pilots participated in a vote of no confidence in management, BALPA said. The symbolic vote is a protest against the carrier’s plans to close bases in London Stansted, Newcastle, and elsewhere, costing more than 700 pilot jobs, which BALPA said was “unrealistic.” Such a unified rebuke of management is unprecedented in easyJet’s history, BALPA said.
- After blasting British Airways for a plan to “fire and rehire” pilots, the BALPA pilots union instead now is proposing pilots vote on a new package of measures to preserve as many pilot jobs as possible. Although it is likely almost 300 pilots will be laid off, BALPA said its proposals could keep that number from rising. The proposal includes voluntary reductions in hours and separation; creating a pool of 300 pilots on furlough that can easily be rehired if demand returns; pay cuts of up to 20%.
- Alaska Airlines said it is sending WARN Act notices to employees on Aug. 1. The carrier said 30% of its employees have taken voluntary leaves-of-absence, but it may need to reduce headcount further. How many furloughs or layoffs needed depends on how many more employees take voluntary separation, the carrier said. In addition, it is reducing its corporate workforce by 15%, or 300 positions, on Oct. 1. Separately, the Air Line Pilots Association said it and Alaska have reached a deal to avoid pilot furloughs and layoffs that includes leaves of absence and early retirement.
- Demand is not returning at previously forecast levels in India, leading IndiGo to announce that it will reduce headcount by 10%, or 2,400 employees. The carrier will not lay off any of its 3,000 pilots, local media report. IndiGo had hoped to stave off mass layoffs through pay cuts and other concessions, but CEO Ronojoy Dutta said traffic has not returned to the levels IndiGo predicted at the start of the pandemic. These are the first large-scale layoffs in IndiGo’s history.
- Air France got its main pilot union (SNPL) to accept changes that pave the way for Transavia, the group’s low-cost unit, to assume responsibility for most domestic flying. Overall domestic flying will shrink about 40%, in line with government rules tied to rescue aid—Paris wants to reduce domestic flying for environmental reasons. The airline can’t be all that unhappy, given the many years of heavy losses it’s incurred flying within France.
Transavia, by the way, can now fly from Paris De Gaulle airport, not just Orly, thanks to the new pilot deal. In exchange, management agreed to refrain from launching any new subsidiaries like Joon, or for that matter to acquire any such airlines. There are also stipulations like the obligation to add four Transavia planes for every three mainline planes removed, the idea being to create more pilot jobs.
Sometime before the end of this month, Air France/KLM will unveil a new post-pandemic business plan, designed to address competitive disadvantages that were hard to overcome during normal times. Sometimes, a crisis presents opportunities to do things previously impossible, i.e. achieve certain labor reforms.
- Icelandair and the Icelandic Cabin Crew Association “managed to resume discussions and have signed a new collective-bargaining agreement.” It’s valid through September 2025 and features similar terms to an interim agreement signed in June. The company said it meets the objectives of increasing productivity and flexibility while ensuring competitive pay for flight attendants. “Due to this progress, Icelandair’s pilots will not take over responsibility for onboard safety.” The most recent cabin crew layoffs will be withdrawn.