Dispute Worsens at Freight Only Air Carrier as Cargo Unions Reject Compromise

LUXEMBOURG – Deteriorating relations with unions could hardly come at a worse time for Europe’s largest freight only air carrier Cargolux as the airline strives to find a new investor after Qatar Airways withdrew support at the end of last year having only held its 35% share of the stock for 16 months. The cargo only outfit is currently reliant on Luxembourg government support and needs to save on operating costs to attract interest elsewhere and possibly even to survive in its present form.

The Luxembourg Confederation of Christian Trade Unions (LCGB) and OGBL unions state that the intent of the latest offer is to undermine union power in the country as similar problems continue at another national carrier, Luxair, also supported by state cash, and reportedly also where staff are considering industrial action. Any strike is likely to be preceded by a conciliation process and whilst management says the company agrees with union demands to reinstate a Collective Work Agreement (CWA) it outlines terms for such an accord which the workforce representatives find unacceptable.

Cargolux management says, in a spirit of compromise, in its latest offer it has reduced its original employee cost savings target from US$ 37 million (US$ 10 million in 2013 and US$ 27 million in 2014) to US$ 12.5 million for 2014 only as demanded by the unions. The sticking point is that the airline wants to recoup what it considers essential funds missing due to the agreement by compensating with ‘savings in other areas of the business’ which the unions feel give it carte blanche to make cuts wherever it likes.

With the company stating that it is necessary to establish a successful and financially sustainable operation to achieve certainty of employment or expansion of activities, whilst unions demand agreement to precise terms from the management or strike action will follow any attempts at conciliation, Cargolux is hardly looking a tempting target for investors at the moment in a country where industrial action is traditionally a rarity.

Photo: It seems the wheels may be coming off the Cargolux negotiations as with this freighter in 2006.