New Swiss Airline Gives In To Union

by Ulrika Lomas, Tax-News.com, Brussels

26 February 2002

Investors in Switzerland's new airline, Swiss, formed from the rubble of bankrupt Swissair and previously successful regional carrier Crossair, must be busy this morning writing down the value of their asset as news emerges that Kapers, the airline's cabin crew union has won a deal that preserves 90% of inflated Swissair pay levels.

Kapers said the accord was a “historic milestone” in the creation of swiss. Cabin personnel agreed to keep salaries between SFr3,450 and SFr 7,780 per month while curtailing their holiday allowance. The crew would be allowed three days’ less leave per month; however, they would have at least 28 days off per year. Under the new contract, the cabin crew would be paid less in the way of expenses and they will not be guaranteed overtime payments. The crew is also set to receive lower commissions on in-flight sales.

The new contract will apply to both Swissair and Crossair cabin personnel, stressed Swiss executive, Björn Näf. In effect therefore existing Crossair staff will receive a handsome pay increase. Swissair staff had strongly opposed any pay cuts to fall in line with Crossair staff.

Kapers said it hopes the union rank and file will welcome the accord with Crossair. The union is set to discuss the agreement next week, once the details are clarified, and plans to reach an accord by March 27, ahead of the April 1 launch of Swiss.

When the new airline's name was announced a month ago, Crossair Chief Executive, Andre Dose, said he wanted to cut Swissair's cost levels by as much as a third; yesterday's deal will deliver savings of a mere 10%, said analysts.

Negotiations are ongoing with Swiss pilots and ground staff, but after the airline's capitulation to cabin crew there can't be much hope that significant savings will be achieved. Sell your shares now, while you still can!

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