Em­braer boss warns bank­ruptcy ahead for air­lines

Sunday Independent (Ireland) - Business & Appointments - - FRONT PAGE -

THE Irish CEO of Em­braer’s com­mer­cial jets arm says the air­line sec­tor is in a down­turn that will see a num­ber of Euro­pean air­lines go bank­rupt.

Some less-known car­ri­ers have al­ready gone wal­lop but “we will see more”, said John Slat­tery.

“Costs are go­ing up and fares are go­ing down — clas­sic lead­ing in­di­ca­tors. Man­age­ment teams at air­lines are more fo­cused on fi­nan­cial met­rics than ever be­fore but we will see plenty more bank­rupt­cies.

“As War­ren Buf­fett said, it is only when the tide goes out that you see who is wear­ing their swimwear. The tide is go­ing out now.”

Ac­cord­ing to Slat­tery, the air­line in­dus­try can ac­tu­ally ben­e­fit: “It will lead to fis­cal dis­ci­pline, cer­tain lev­els of con­sol­i­da­tion. Air­lines will go away and very often that is not a bad thing be­cause those that are left are more ro­bust and will be able to im­prove prof­itabil­ity.” AER Lin­gus has gone over the heads of its trade unions to di­rectly pitch to staff what it claims is a bet­ter em­ploy­ment deal that union rep­re­sen­ta­tives have walked away from.

The air­line is at­tempt­ing to win agree­ment from load­ing staff at Dublin Air­port on pro­duc­tiv­ity gains it needs ahead of the huge growth it is pre­dict­ing.

In a let­ter posted to the home ad­dress of each in­di­vid­ual staff mem­ber, the air­line claimed the union had walked out on a deal that would have de­liv­ered a ba­sic pay in­crease, bet­ter ros­ters and sus­tain­able di­rect em­ploy­ment for load­ing sec­tion staff.

The let­ter in­cluded a copy of a draft agree­ment sent to Siptu ear­lier this month.

The com­pany’s move to deal di­rectly with staff at the former trade-union strong­hold comes as it also warned work­ers it’s in­stalling new CCTV cam­eras and in­tro­duc­ing ran­dom pa­trols by a se­cu­rity firm. The moves are due to con­cerns it has over what it claimed was theft by a small per­cent­age of staff “of guest prop­erty, dam­age to com­pany prop­erty and in­ter­fer­ence with col­leagues’ prop­erty”.

The Aer Lin­gus let­ter said that ne­go­ti­a­tions to agree the draft had been con­struc­tive but that the union had since walked away from a deal that would have given “more money and bet­ter ros­ters”.

“In re­cent weeks we ex­plained to your rep­re­sen­ta­tives (in great de­tail) that the cur­rent costs and op­er­at­ing model were un­com­pet­i­tive when com­pared with other ground han­dlers at Dublin,” said the let­ter to em­ploy­ees.

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