Norway’s once-high-flying Norwegian Air, which has been hard hit this year by problems with its new Boeing Dreamliner jets, was caught in more turbulence this week. A long-simmering pay conflict with its pilots led to disputed disclosure that the pilots already dominate the list of the airline’s most highly compensated employees, but now they’re threatening to go out on strike.
Negotiations between the pilots and Norwegian Air broke off on Monday, leading to warnings of a strike in two weeks. That would probably ground much of Norwegian’s fleet around Europe, adding to the Dreamliner trouble that already has severely disrupted Norwegian’s launch of long-haul routes to Bangkok and New York last summer.
The pay conflict with Norwegian pilots turned nasty last week, when the airline’s management resorted to the unusual step of compiling a list, published in newspaper Aftenposten, that ranks its 100 most highly compensated employees in 2012. Fully 93 of them were pilots, who also claimed the list’s top two spots with total annual compensation of NOK 1.97 million and NOK 1.96 million (about USD 330,000) each.
In third place came Norwegian’s finance director, with compensation of NOK 1.92 million. Another pilot was in fourth place and the 5th most highly compensated employee was the airline’s director of operations.
Norwegian’s high-profile chief executive Bjørn Kjos landed way down the list, in 32nd place, with compensation of NOK 1.49 million. Kjos, though, has always claimed a relatively low executive salary because he’s the founder of Norwegian and one of its main stockholders. He thus has other means of earning money on his heavy involvement in Norwegian.
The rather enlightening if embarrassing disclosure of the pilots’ total compensation set off howls of protest from the pilots’ representatives, who claim it doesn’t portray a “proper overview” of their salary situation. The most highly paid are captains who also can claim special “leadership” pay, claim the pilots’ advocates, and the total amounts also include compensation for travel costs and other extra payments tied to the job.
Halvor Vatnar, leader of the pilots’ association at Norwegian, told Aftenposten that actual base salaries are much lower, and that all the extras (tillegg) shouldn’t be included in determining pay levels. Vatnar initially claimed that the starting base salary for new pilots was “down around NOK 400,000-500,000.”
That’s still decent starting pay, even in high-cost Norway, but Vatnar quickly corrected his figures after Aftenposten had published them late last week. On Monday he told Aftenposten that pay levels were in fact much lower.
“Many of us earn well and we’re not complaining,” Vatnar conceded, “but the starting salary for a pilot in Norwegian is NOK 317,000 (USD 52,000).” He thinks that’s low, and that’s what the quarrel is mainly about.
Pilots’ own pay details
In response to management’s decision to reveal the most highly paid positions in the airline, the pilots’ association decided to release more detailed figures of its own. Starting base salary for a co-pilot is currently NOK 317,741 a year, rising to NOK 573,817 after five years and NOK 692,478 after 10 years, they told Aftenposten.
Starting base salary for a captain is NOK 811,149 (USD 135,000), rising to NOK 935,733 after five years and topping at NOK 1,057,885.
The much higher actual compensation figures revealed by management “take into account all the extra pay,” Vatnar said, including that granted for administrative leadership, flying on scheduled days off and compensation for being away from home.
“When we look at the actually starting pay for a pilot in Norwegian, it’s around the same as a primary school teacher,” Vatnar said. He stressed that base pay includes overtime and compensation for night, weekend and holiday duty. He also claimed Norwegian pilots work three out of every four weekends and as much as 60 total hours a week.
Still hoping for agreement
Norwegian spokeswoman Anne-Sissel Skånvik said the airline decided to release its total compensation figures for pilots to show that actual pay is much higher than the pilots claim themselves. As for the strike threat, she told news bureau NTB that “we always hope we’ll come to agreement (with the pilots) and won’t go in for crisis maximizing now.”
Meanwhile, the airline’s technicians are also unhappy. Their leader was called in for a meeting last week with Kjos after telling newspaper Finansavisen that Norwegian took “a calculated risk” in launching its new long-haul intercontinental service with Boeing’s untried 787 Dreamliner jets. That angered Kjos but the two reportedly came to terms and Roger Handeland, leader of the Norsk Flytekniker Organisasjon, wasn’t dismissed.
Kjos later lashed out at the technicians’ leader once again, though, telling Finansavisen late last week that he was “surprised folks make statements about things they know nothing about.”