Finnair reaches deal with pilots

HELSINKI, Finland – Finnair and the Finnish Air Line Pilots’ Association (SLL) have reached a result in the negotiations related to Finnair’s savings program.

The agreement brings Finnair 17 million euros in permanent annual savings. Approximately 11 million euros will materialize gradually over the 2-year CLA period. Approximately 3 million euros will materialize in the coming few years through growth and the remaining 3 million euros in the future through changes to pensions and the employment terms of new pilots. In return, Finnair gives pilots protection for redundancies for the next two years. It has been additionally agreed that Finnair will study an incentive plan for pilots. The savings agreement is contingent on the realization of this incentive plan that will be formulated during autumn.

The savings agreed with SLL are mainly reached through changes to salary and working time. Finnair and SLL agreed in June on transferring to a new wage model. However, the savings solution was finally developed based on the current wage model.

“We are pleased that in this difficult situation we were able to negotiate a savings agreement with the pilots,” says Finnair CEO Pekka Vauramo. “The incentive plan included in the agreement requires further study, which will be finalized during autumn. The majority of the savings would materialize on a quick schedule, which is essential in Finnair’s current financial situation. I wish to thank the members of SLL for their responsible contribution to the realization of the agreement. I know that the agreed CLA changes are not easy for anyone. The agreement is a great display of pilots’ commitment to their company and its future.”

”We wanted to offer pilots protection against redundancies for the next two years as a compensation for the savings. Considering the situation of the world economy and our industry, such a long protection period is exceptional,” adds Vauramo.

In October 2012 Finnair began a 60 million euro cost savings program – additional to the 140 million euro cost savings program begun in August 2011 – mainly in personnel-related costs. The negotiations on cabin personnel’s 18 million euro savings proved unsuccessful and the company is now forced to proceed with increasing the use of outsourced cabin service. Finnair would have rather continued flying with its own crew.

Finnair has reached savings agreements with personnel groups belonging to IAU and with Finnair’s salaried and senior salaried employees and engineers (FYT and FIRY). In addition, Finnair has made cuts in its administration and support functions, and Finnair’s Board of Directors has also reduced the variable part of the top management’s total remuneration as well as other benefits.