Partial solution reached in pilot negotiations, discussions continue
A partial solution has been reached in the cost savings negotiations in line with the Finnish Employment and Growth Pact between Finnair and the Finnish Air Line Pilots' Association (SLL). A decision has been made about transferring to a new wage model that lowers unit costs. In addition, the parties have agreed on Collective Labour Agreement changes concerning new pilots, which would result in 2 million euro savings in the future. In order to finalize the new wage model the negotiations will be continued until 7 September.
“We were able to agree on essential topics related to the employment terms of new pilots. The remaining 15 million euro cost savings will be sought mainly from the new wage model that we have been working on together with SLL,” says Finnair COO Ville Iho. “The model will lower our costs and support the increase of productivity. Both parties have committed to transferring to this new model. Naturally we continue to negotiate on other savings elements as well.”
“Due to the complexity of the new wage model it will take time to finalize itand to agree on a final savings amount. The aim of the savings agreement is to enable Finnair’s growth and ensure that we can handle growth with our own crew,” Ville Iho adds.
Finnair will not lay-off or temporarily lay-off pilots before the negotiations have ended.
In October 2012 Finnair began a 60 million euro cost savings program – additional to the 140 million euro cost savings program begun in August 2011 – mainly in personnel-related costs. Savings negotiations on cabin personnel’s 18 million euro permanent savings proved unsuccessful and the company is now obliged to consider increased use of outsourcing, even though it would rather continue flying with its own crew. Finnair has reached savings agreements with personnel groups belonging to IAU and with Finnair's white-collar employees and engineers (FYT and FIRY). In addition, Finnair has made cuts in its administration and support functions, and Finnair’s Board of Directors has also reduced the variable part of the top management’s total remuneration as well as other benefits.
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