Pilots' salary demands don't fly
By : Robert Wylot
Pilots of national carrier LOT Polish Airlines went on strike last week demanding a 90% increase in wages, salary levels that the management said LOT could ill afford.
The negotiations between the airline and the pilots union, ZZPK, foundered when the fliers suspended operations for two hours on June 18. A temporary settlement was negotiated two days later pending further talks.
"We agreed to refrain from further strike action to allow time for negotiations," said Jerzy Sadel, ZZPK's spokesman. Meanwhile, other unions in the airline said they were not preparing for any industrial action. "We aren't striking and aren't intending to strike," said Ryszard Kobus, president of the Solidarity trade union in LOT, which also incorporates pilots.
Leszek Chorzewski, spokesman for LOT, said the carrier's 480 pilots earn zl. 230,000 ($57,500) annually and that a rise of 90% would cost the company about zl. 99.3 million ($24.8 million). The airline posted a zl. 28 million ($7 million) net profit in 2000.
Despite last year's positive figures, the carrier's recent financial standing has been downbeat. Sadel admitted the year's financial results so far have not been promising, but this should not affect pilots' claims. "We had a zl. 315 million ($79 million) net loss on sales, and the operating loss in 2001 has already reached zl. 220 million ($55 million) by May," he said.
Sadel said poor management is to blame for the current losses and that the company could afford pilots' wage claims. "Our claims make up less than 1% of the company's costs," he said. "The firm is simply managed badly." Sadel also blamed the poor financial showing of SAir Group, which holds a 38% stake in LOT. "SAir Group's shares have been sliding down for weeks," he said.
Despite the recent negative finances, Chorzewski said the airline will ultimately post a profit in 2001, but this wouldn't affect the company's decision over the pilots' claims. "Meeting the pilots' demands is impossible," he said. "It would have catastrophic consequences for the company, especially in view of its financial situation and the need to invest before the imminent opening of the skies." As Poland prepares to join the European Union, LOT faces the liberalization of all air traffic after accession.
After selling SAir Group a 38% stake in 1999, the treasury is now planning the next stage in the company's privatization either with a second sale to SAir Group or an initial public offering. The company returned to the black in 1998 and has since reported modest net profits.
