UPDATED: Norwegian Air, faced with an ongoing and bitter strike by its pilots in Scandinavia, announced a “reorganization” on Thursday that divides its Scandinavian pilots into three new subsidiaries. The move looked likely to decimate the Norwegian union that represented them, and the airline’s shares jumped on the news when trading resumed after a temporary suspension.
Norwegian said that the airline’s board of directors had held an extraordinary meeting at which the board “decided to establish three new subsidiaries for its pilots in Norway, Sweden and Denmark respectively.”
In a press release sent to the stock exchange, the airline reported that pilots now employed by its Norwegian Air Norway (NAN) subsidiary “will be transferred to the companies in his/her respective country with the existing tariff agreements, working conditions and benefits, including the right to strike.”
The transfers mean, however, that the airline’s Swedish and Danish pilots will no longer be employed by NAN nor represented by the Norwegian Pilot Union (NPU) and its trade union federation YS/Parat, since YS/Parat and NAN can’t enter into labour contracts outside Norway. The Swedish and Danish pilots will be represented by their own unions, and pension rules in Sweden and Denmark will also apply.
Alleged dissension within the union
Norwegian claimed that it had been contacted by Swedish and Danish pilots “who didn’t want to risk their own jobs as a result of NPU’s ultimatum,” which was for all the pilots to be employed directly by the airline’s main parent company Norwegian Air Shuttle AS and not by subsidiaries like NAN. Norwegian’s management had refused to go along, claiming that would allow the pilots to “take over commercial management” of the airline.
Newspaper Aftenposten had reported Thursday morning that there was indeed dissension within the ranks of the pilots’ union. Some pilots who were members of NPU wrote in a recent emails that they deeply disagreed with NPU’s tactics and demands. “We probably have some of the best pay and working conditions in the industry, and Parat’s ‘principles’ will destroy our company,” one pilot wrote in an email obtained by Aftenposten. He claimed that NPU’s and YS/Parat’s demands were impossible for a multinational company like Norwegian Air to accept.
The company called the reorganization “an attempt to give the pilots in each country the possibility to themselves influence their own future.” Management “has made it clear that costs must come down and flexibility must go up in the Scandinavian operation, if the company is to be able to maintain as many pilots as it has today.”
Alternative: Job losses
The alternative, according to Norwegian, would be staff reductions in Scandinavia. “This came down to not having a job or having a job,” Norwegian’s CEO Bjørn Kjos told NRK.
Kjos claimed the ongoing strike by pilots in NAN had endangered jobs throughout the company. By transferring operations over to the new subsidiaries called Pilot Services Norway, Pilot Services Denmark and Pilot Services Sweden, the risk that NAN would need to be declared bankrupt was also reduced.
Labour negotiations “can resume at any time in the respective pilot companies,” Norwegian stated in a press release. A Parat spokesman said the union didn’t recognize the content of the pilots’ emails and denied there was division within its ranks.
“We have had contact with union representatives all over the country today, they back the strike 100 percent and want us to move forward,” Arve Sigmundstad of Parat told Aftenposten. Neither NPU nor YS/Parat had any immediate comment on the reorganization of pilot operations, but later claimed the airline was violating Norwegian labour law by splitting up the pilots in the midst of a strike.
“This doesn’t change anything,” claimed Parat leader Hans Erik Skjæggerud late in the day. Legal challenges loomed.