Cargolux is resisting union demands that it repays $12.5 million of planned labor cost savings to employees if it returns to profit in 2014.
Europe’s largest all-cargo carrier is negotiating a new labour contract for its 1,400 staff as it continues talks with four potential investors over acquiring a 35 percent stake.
The negotiations are delicately balanced, with employees calling on the two Cargolux unions to enter a conciliation process, which is a legal step toward a strike.
The Luxembourg-based airline is battling to cut costs as part of a five-year business plan announced in February that is aimed at returning to profit in 2014 after losing money in four of the past five years. Labor accounted for around a quarter of the carrier’s total costs in 2013, second only to the fuel bill.
“The unions’ demand for partial or full repayment of the saved $12.5 million in the event that Cargolux makes any profit ignores the necessity of long term financial sustainability of the company,” Cargolux said.
Cargolux has made several concessions to the unions in recent months. It has agreed to extend the collective labor agreement through the end of 2014, having previously said it would not renew the pact after it expired in December. It also reduced its planned labor savings from $37 million in 2013 and 2014 to $12.5 million in 2014 only.
The carrier said last week it will consider reimbursing part of the savings — reportedly a maximum of $2.5 million — if it meets its financial targets for 2014.
Separately, Cargolux is expected shortly to unveil the identity of a buyer of a 35 percent stake that was previously held by Qatar Airways. The Middle East airline pulled out of Cargolux in November, 18 months after it paid $117.5 million for the shareholding, following differences over future strategy.
HNA, the Chinese transport and logistics conglomerate, is viewed as the front runner, in the bidding, ahead of Russia’s Volga-Dnepr, owner of AirBridgeCargo.
Cargolux’s loss almost doubled in 2012 to $35.1 million from $18.3 million a year earlier on revenue down to $1.74 billion from $1.87 billion as traffic declined to 646,000 tons from 658,000 tons.
Earlier this month, the carrier took delivery of its eighth 747-8 freighter with five more still to join its fleet.