Embraer boss warns bankruptcy ahead for airlines
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.