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Coronavirus in Argentina: low cost extended wage cuts

2020-07-11T20:59:54.529Z


They are between 15% and 40% in Flybondi. At JetSmart they cut the highest wages. Each company negotiates with its own union.


Luis Ceriotto

07/11/2020 - 8:39

  • Clarín.com
  • Economy
  • Economy

Low-cost airlines Flybondi and Jet Smart agreed with their unions on the extension of the salary reductions that have been applied since April. While the two airlines stopped flying in late March and their staff have been suspended since then , the pay cuts began the following month and, with the new deals, will extend at least until flights resume.

In the case of Flybondi, the agreement that establishes that its 570 employees have a deduction of between 12% and 40% of their pocket wages, which rises to 50% in the case of directors , will govern until the end of September . At JetSmart, with 180 employees , the extension of the agreement that the company presented to the Ministry of Labor is until the end of August and does not apply to the lowest salaries, which had already been affected in the "variable" component of remuneration, a situation that applies equally to employees suspended from all airlines. 

The two "low costs" thus stretched the period of their internal adjustment while waiting to be able to resume passenger flights and, thus, re-invoice after more than four months without registering income . As established by the National Civil Aviation Administration (ANAC), companies are authorized to sell advance tickets for dates after September 1 . But a decision by the Executive Power would still be needed, to nullify the decree that prohibited commercial flights for an undetermined time. 

JetSmart is also responsible for the staff of  100 employees of the other "low cost" airline that came to operate in the country, the former Norwegian, with whom it continues to negotiate .

Flybondi reduced its structure to a minimum in these four months, but maintained its workforce of 570 employees. "The main points of the agreement are: the entire bonus was paid and in a single payment, the 50% reduction in salary is maintained for 3 months for executives and directors and the reduction of between 15% and 40% is maintained for three months months for the rest of the employees, considering a lesser impact on those who receive less salary, "Flybondi said in a statement.

An important part of wages s on covered from the national state. "Month by month we are renewing the ATP . But the bonuses and the rest of the salary bill are paid by the shareholders , since we have been without income for four months," company spokesmen said.

Flybondi belongs to several investment funds, led by the American Cartesian Capital Group , which in turn is a shareholder in another regional "low cost", Viva Air .

JetSmart also belongs to a US investment fund, although in this case it is the sole shareholder: Indigo Partners , a fund led by former aviation executive William Franke .

"After presenting our sector diagnosis to the Nation's Ministry of Transport, we applied to the ATP and in the last days we talked with the unions of JetSmart and Norwegian to implement a temporary reduction for June, July and August about the salaries of greater amounts ", Gonzalo Pérez Corral, general manager of the Argentine affiliate of JetSmart said. "In the case of JetSmart, we reached an agreement and presented it to the Ministry of Labor, while we continued working with Norwegian's ," added the executive.

Unlike traditional airlines such as Aerolineas / Austral, LATAM Argentina and Andes, which negotiate with several unions at the same time,  the "low cost" negotiate with a single union, created during the Macri administration. These unions, one for each low cost, are registered with the Ministry of Labor but have no legal capacity to negotiate joint ventures .

The two airlines have shrunk their fleet or slowed their expansion in these quarantine months: Flybondi reduced it from 5 to 3 planes, and is in the process of returning one more plane. However, in the company they assure that it is a temporary reduction, waiting to resume operations.

"The date to fly again is September 1 and we estimate that in those first few weeks there will be very low activity. But the objective is to be flying with four planes by December and with five for the first leg of 2021," their spokesmen said.

Source: clarin

All business articles on 2020-07-11

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