Now Reading
Norwegian Faces Industrial Strife as it Cuts Costs and Crew Bases

Norwegian Faces Industrial Strife as it Cuts Costs and Crew Bases

Norwegian Faces Industrial Strife as it Cuts Costs and Crew Bases

Back in January, low-cost carrier Norwegian announced plans to close several pilot and cabin crew bases in Italy, Spain and the United States.  Short-haul bases in Palma de Mallorca (PMI), Gran Canaria (LPA) and Tenerife (TCI) in Spain; Rome Fiumicino (FCO) in Italy; along with long-haul bases in Stewart (SWF) and Providence (PVD) in the United States will all be axed and some routes will also be cut as part of the shakeup.

It’s part of Norwegian’s so-called ‘Focus 2019’ cost-cutting strategy that will hopefully see the embattled airline return to profitability.  After several years of rapid expansion, Norwegian reported a loss in 2018 of nearly USD $170 million.  The airline attributed the losses to increasing competition, rising fuel prices and “several unforeseen challenges” – most notably, highly publicised problems with the engines on some Boeing 787 Dreamliner aircraft.

Norwegian is introducing a whole raft of cost-cutting measures – nothing is off the table and nothing is too small that it can’t be considered (every cent counts).  As just one example, we’ve heard the airline has removed facial tissues from onboard lavatories – it might seem like a minor change but it all adds up.

The most controversial cost-cutting measure though is likely to be the decision to close some of its crew bases.  At the time, Norwegian promised to find alternative bases for all of the affected crew – despite the financial situation the airline has found itself in, this seemed like a generous decision which was definitely worthy of praise.

It will, however, mean that staff have to up roots and move a significant distance if they want to continue working for Norwegian.

It’s probably not too surprising then that negotiations with Spanish unions have not been going well.  Norwegian has a Collective Labour Agreement (CLA) with its crew in Spain so any big decisions have to be negotiated with the unions – in this case, the USO union who represent cabin crew and the SEPLA union who represent pilots.

“This process can end with or without agreement, either because the conditions are not acceptable or because the reasons Norwegian must allege are not considered as valid,” explains a spokesperson for the USO union.

In this case, Norwegian says it has to close the crew bases because of its financial position – a situation which has just got even worse now that it’s been forced to indefinitely ground its small fleet of Boeing 737 MAX aircraft.

“In other words, Norwegian must prove that they really need to close the bases, otherwise, Norwegian could be taken to court. For now, USO considered that the reasons alleged by the company are not valid.”

After three weeks of negotiations, talks have now broken down without an agreement.  Norwegian could force the affected to move to the mainland but then that might be subject to a legal challenge from the unions or even industrial action.  The USO union says they are actively considering all of their options right now.

But Norwegian tells us they did enter negotiations “in good faith and with a constructive approach” – the overarching principle was to save jobs by offering a move to a base on the mainland as well as monetary compensation.  “Nothing of what we have put on the table has been deemed good enough by the unions’ representatives, who are failing to understand the current situation,” the airline explained.

At the moment, there’s a stalemate and both sides are considering their positions.

Meanwhile, Norwegian has been forced to deny several claims made by the Italian ANPAC union, including an allegation that the airline plans on ending all flights between Italy and the United States by October and closing all of its crew bases in the country.  To rub salt into the wound, ANPAC even labelled Norwegian as the Oslo-based carrier of IAG (the airline group who made several failed bids for Norwegian last year).

A spokesperson for Norwegian, Alfons Claver claimed the allegations from ANPAC would “scare both consumers and colleagues working at Norwegian, whose work also depends on the confidence of passengers.”

Unfortunately, there’s no getting around the fact that Norwegian must cut costs – it’s a private company and there’s only so much debt it can rack up.  Sadly, some staffers are realising that Norwegian is no longer the small and endearing company they once knew and loved – tough business decisions have to be made and sometimes employees get caught in the crosshairs.

BoardingArea