CYPRUS Airways (CY) expects answers from all five of its unions on the Labour Ministry’s compromise proposal to save the company’s finances by the end of the first week of January.
Two of the unions, the engineers’ union ASSYSEKA and SIDIKEK-PEO, have already taken the proposal to its members, who have given the green light for the changes. The airline’s biggest union CYNIKA and pilots’ union PASIPY, along with smaller union SYPKA, have yet to take the proposal to their general assemblies but plan to do so after the Christmas period.
“We expect the final decisions around the fourth or fifth of January and at the latest by January 7,” an airline spokesman said yesterday.
PASIPY has warned that it cannot guarantee its members will vote in favour of the package of measures agreed with management and the Labour Ministry on Monday.
SYPKA, a second of CY’s five unions, also expressed similar concern.
The representatives of the five unions on Monday agreed to over 200 staff redundancies, and wage reductions ranging from 5-10 per cent, after months of negotiations on a strategic plan to save the ailing carrier. Only a number of last-minute changes in favour of the unions saved the process.
Staff were being asked for wage reductions of five per cent for those earning under £30,000 and 10 per cent for those earning over that figure. The 10 per cent was cut back to eight per cent under the final deal.
In all, there are 18 proposals included in the compromise. Others included a suspension in wage hikes for 2005 and 2006, axing sick-leave benefits and the reduction of Sunday overtime pay by 50 per cent. It also included increasing staff contributions to social insurance from 3.2 per cent to 6.3 per cent and cost-cutting in the catering and engineering departments.
The biggest shake-up was concerning redundancies. Around 120 staff will be axed as a result of the withdrawal of two Airbus A320s on November 1. Another 50 or so staff will take early retirement and will not be replaced, and the 14 pilots that union PASIPY staged a strike over last month will also go. A number of management jobs will also be cut, and around 50 non-permanent staff have already been let go.
CY needs to save some £22 million to put the company back on its feet. Losses for the year are expected to be in the region of £30 million.
The concessions from the union are expected to save the airline around £10 million. The other £15 million will be saved through changes to routes and other measures to be taken by the company itself.
Even with savings of £25 million in 2005, the airline will still continue to run at a loss until at least 2006, according to forecasts.
As soon as the compromise plan is in place, the government will seek permission from the EU to guarantee new loans for the airline to assist it on the road to recovery.
