Pilots end dispute with Swiss

The pilots' dispute has been a thorn in the company's side Keystone Archive

The national carrier, Swiss, and two pilots' unions have reached an agreement on job cuts crucial to the company's survival.

This content was published on July 16, 2003 - 15:19

The Swiss Pilots Association has accepted the firing of 559 former Crossair pilots, while Aeropers said former Swissair staff would work part-time to avoid lay-offs.

Martin Gutknecht, a Swiss Pilots Association spokesman, told swissinfo that pilots who lose their jobs will receive between SFr85,000 and SFr140,000 in redundancy pay.

“The remaining pilots cannot be fired until the end of the general contract in October 2005,” Gutknecht said.

Gutknecht said it was up to individual pilots to either accept the offer or seek further legal action against Swiss.

“We will recommend nothing. So every single pilot has to decide,” he added.

Aeropers, the union representing former Swissair pilots, found another solution to avoid the expected 150 to 200 lay-offs. The pilots will work part-time, cutting their workload by an average of 15 per cent.

The final 150 pilots hired by Swissair will have to reduce their hours by a third.

Swiss also announced on Wednesday that it was ditching plans to set up its Swiss Express regional subsidiary as part of the deal struck with pilots' unions.

Lloyd Brown, a London-based aviation analyst with Ernst & Young, told swissinfo that the deal with the unions was “absolutely critical for Swiss”.

“Without this they couldn’t have gone on with the restructuring plan they announced, because the court of arbitration ruling would have made that impossible,” Brown said.

Controversial ruling

Last month Swiss was ordered by court in Basel to immediately reinstate 169 sacked former Crossair pilots.

The court also ruled that Swiss would have to share future redundancies equally between former Crossair and Swissair pilots.

Chief executive André Dosé warned that the decision threatened the airline’s survival and called on unions to find a compromise by July 15 – or face the cancellation of all pilots' contracts.

The deal clears a major hurdle facing the airline’s management, as the carrier battles to find around SFr500 million ($364 million) in cost savings.

Swiss is currently losing more than SFr2 million per day and is running dangerously close to becoming technically insolvent under Swiss corporate law.

Last month Dosé appointed the British bank Barclays to find investors prepared to inject SFr500 million of fresh capital to keep the company running.

Last week Swiss announced plans to slash 25 per cent of its destinations this autumn - almost a month after declaring it would cut its fleet and staff by a third.

Breakthrough

The breakthrough with the unions comes a month after Swiss said it was cutting its fleet and workforce by a third.

Brown said Swiss had been under pressure from potential airline partners to resolve the dispute.

“A lot of airlines have already said to them that if they don't get their finances and house in order they wouldn’t be interested,” he said.

He also predicted that by resolving the dispute with its pilots, Swiss was more likely to conclude deals with other unions.

“Now the pilots are on board and prepared to sign up to the restructuring plan, other unions are likely to follow.”

The long-running dispute with the two pilots' unions has been one of the biggest challenges facing the 15-month-old carrier.

Ever since Swiss was formed from the wreckage of the collapsed Swissair and the regional carrier Crossair, pilots from both former airlines have battled with management.

Swiss and the cabin crew unions, Kapers and Unia, have reached an agreement on 935 job cuts.

Both sides said on Thursday that they successfully conducted negotiations on redundancy terms, including the closure of five crew bases.

swissinfo, Jacob Greber in Zurich

In brief

Swiss has settled a long-running dispute with its pilots' unions.

The Swiss Pilots Association has accepted the sacking of 559 former Crossair pilots.

The Association will also forgo its right to insist on a recent court ruling forcing Swiss to reinstate some of the sacked pilots.

In return, sacked captains will receive a one-off payment of SFr140,000. Co-pilots will receive SFr85,000. Foreign pilots will get SFr50,000.

The redundancies are expected to cost Swiss up to SFr60 million.

Former Swissair pilots, represented by Aeropers, will cut their worktime by 15 per cent on average, leiminating the need for 150 to 200 lay-offs.

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