Iberia pilots to bear brunt of cost-cutting measures
Published: April 25, 2012
Iberia A321. By Rob Finlayson
In a backlash against continued industrial action by its pilots, Iberia (IB) is planning to cut its pilot payroll costs by 20%.
IB said the cost-cutting measures will apply exclusively to pilots because they are the only employee group that has failed to agree a new union contract after more than two-and-a-half years of negotiations ( ATW Daily News, April 10 ). Ground staff and cabin crews have already reached agreements.
The unit cost cuts will include a 12% reduction in pilot pay scales, plus a number of other measures that will generate an additional 8% savings. These include scrapping certain automatic inflation-linked pay increases, and adjusting the level of remuneration paid to pilots with 15 years’ seniority who choose to work fewer hours to reflect hours worked. In addition, pilots who lose their license will have their guaranteed income slashed from 90% to 45% of salary, and incentive pay for attaining objectives will be dropped.
At the same time, the airline is targeting a 25% increase in productivity aimed at making it “more competitive and strengthening its position in a period marked by weak demand, high fuel prices and fierce competition,” it said. IB argued that challenging market conditions have been aggravated by a series of strikes held by the SEPLA pilots union, protesting the launch of low-cost carrier Iberia Express. IB estimates the strikes are costing the company €3 million ($ 3.95 million) per strike day.
These productivity gains are again targeted at pilots, with the number of hours worked by IB pilots increasing from the 820 or 850 flying hr. per year (depending on distances flown) stipulated in the last collective bargaining agreement to 900 hr. IB claims the actual number of hours flown is closer to 650. Seniority-linked extra vacation days will also be dropped, and there will be changes in on-call arrangements. The composition of flight crews will also be modified within the limits of current legislation.
IB financial manager José María Fariza described the measures as “the sole means of ensuring success in the difficult situation faced by the airline,” and “absolutely necessary to enable us to compete successfully in a globalized market.” IB has called on SEPLA to return to the negotiating table.