Estonian Air makes last-minute attempt to avert pilots’ strike

03.01.2013, 14:44

Estonian national airline Estonian Air and the pilots’ union ELA started negotiations yesterday in an attempt to avoid the strike that will start on January 7, writes Äripäev.

The outcome of the talks could well determine the fate of the whole airline.

Jan Palmer, CEO of Estonian Air, did not wish to comment the negotiations and Rauno Menning, chairman of the pilots’ union, was unavailable yesterday.

“If we fail to reach an agreement and the pilots go on strike, it would be difficult for the airline to remain in business and it could go bankrupt,” said Palmer, adding that the pilots' strike announcement has already had a negative effect on the airline's financial standing as ticket sales have decreased.

Today the pilot’s union is expected to meet with the public conciliator Henn Pärn to get more information about the specific demands of pilots.

Pärn has said that the relationship between the Estonian Airline Pilots Association and Estonian Air leadership was messy. “The strike notice is confusing and there is nothing to conciliate. There are no straightforward demands that we can embark from,” he added.

According to Pärn, pilots seem to be demanding a collective agreement at 2008 terms. The pilots and the airline have been negotiating since 2008, but in 2010 the talks broke down.

CEO Palmer says that the union has given them an ultimatum to sign a new agreement with the pilots. “That will never happen, so to say, because the company could not live with that. I do not have any possibility to sign such a contract,” said Palmer.

Chairman of the airline's supervisory board, Erkki Raasuke, said that while a strike would not automatically mean the bankruptcy of Estonian Air, it would put it in an extremely bad situation.

In the meantime, the government has agreed to pay the company EUR 8.3m in tranches while at the same time the government has asked the European Commission for permission to bail out the airline.

Raasuke has also said that Estonian Air needs between EUR 50m and 70m depending on how the company will be able to offload planes it is not using, and the financial situation at the time of the recapitalization.

Estonian Air's operating loss for the first nine months of 2012 was 20m.