NEWS ANALYSIS: Neither Norwegian Air nor its pilots could declare victory after an 11-day strike that stranded around 200,000 passengers, cost the company millions and left the pilots without the collective bargaining agreement they had sought. Passengers, meanwhile, continued to face flight cancellations and delays on Wednesday morning.
Norwegian Air had warned before the settlement landed Tuesday evening that it may take several days before its flights are running on schedule again. Airline officials said Tuesday night that they hoped some degree of normalcy would return Wednesday afternoon and evening, but they ended up having to cancel 108 flights from Norwegian airports alone. Oslo’s main airport at Gardermoen was hit hardest, with 44 cancellations.
Commentators claimed the strike settlement itself amounts to a ceasefire for the next three years. While the Scandinavian pilots’ union leaders tried to put a brave face on their agreement with Norwegian Air, they didn’t get what they wanted most: A collective bargaining agreement with the airline’s parent company, Norwegian Air Shuttle (NAS). Instead, as newspaper Aftenposten reported on Wednesday, they receive job guarantees from NAS for three years, but the details of that deal were not released.
The Scandinavian pilots did prevail with their demand for a seniority system that encompasses all of Norwegian’s bases in Europe. That means the Scandinavian pilots will mostly retain the highest seniority in the company, and thus more protection from any future staffing cutbacks. They face being transferred, though, to bases outside Scandinavia.
The pilots also gave up their lucrative pension program for those younger than age 50, they won’t get any pay raise this year and they accepted a lower tax-free one-time payout from their Loss of License insurance. They’ll still get a minimum of 184 days off every year.
Kjos retains popularity
The deal lowers costs for Norwegian Air and chief executive Bjørn Kjos prevailed in his refusal to give up what he calls “commercial steering” of the airline. He says the strike has nonetheless been “completely terrible” for the airline he founded and has built up over the past 14 years. He has apologized profusely for the disruptions caused by the strike and for the forced layoffs of other airline employees and external suppliers.
The airline, which posted one of its first major losses last year, says it’s too early to assess the actual costs of the strike. Newspaper Dagens Næringsliv (DN) reported that Kjos himself has suffered personal financial losses, if only on paper. He remains the largest shareholder of Norwegian Air through the firm he owns with his brother Tore Kjos, HBK Invest, and the dive in Norwegian Air’s share price since January has cut the value of HBK Invest’s stake by around NOK 700 million, NOK 100 million just during the period when the strike occurred.
A survey conducted by newspaper VG, however, showed that nearly half of Norwegians questioned have the most sympathy for Kjos after the strike ended. Only 26.1 percent had the most sympathy for the pilots who went on strike. That’s in line with earlier indications that the well-paid pilots, said to have among the best working conditions in the highly competitive airline industry, lacked public support. Even some of the pilots’ union’s own members criticized the strike. It wasn’t just other Norwegian business leaders, several professors and analysts who claimed that the union was making unreasonable demands in today’s competitive climate. When the union called on other Nordic labour federations to support it through sympathy strikes, it remained questionable what kind of public support such strikes would have received.
Bumpy ride ahead
Now Kjos seems to have secured some peace for at least the next three years, but the tough international competition in the airline industry will continue along with the need for more cost-cutting. The next round of negotiations with Scandinavian workers who suddenly must compete with a lower-paid international work force will likely be just as tough. Their jobs are at risk, and the question remains whether it will be possible to run an international company like Norwegian from Norway, because of the country’s high costs and labour standards.
The more immediate questions were whether Norwegian Air’s passengers will forgive the disruptions of the strike and forget the uncertainty it posed, and how quickly they’ll return. Ticket sales plummeted during the strike and the airline was running full-page ads in local newspapers on Wednesday, apologizing for the turbulence and welcoming passengers back.
“In order to run a sustainable airline for the future, we must dare to challenge and think differently,” the ads read. “Only then can Norwegian be strong amidst international competition and secure our employees all over the world. Only then can we be sure that you can continue to travel cheaply with us.” The airline hoped for business as usual by Thursday, but both it, the unions and passengers had best buckle up for more bumpy rides ahead.