Talks between Cargolux and labor unions over planned employee cost savings have broken down, shortening the odds on a strike at Europe’s largest all-cargo airline.
Unions rejected a final offer from the Luxembourg-based carrier, and negotiations will now continue with the participation of a third party mediator.
Cargolux said it regretted the decision of the two unions, representing the majority of its 1,400 employees, to end bilateral talks after it had made “significant” concessions for an agreement.
The breakdown of negotiations is a setback for the Luxembourg government, Cargolux’s majority owner, which is in talks with four potential investors to take over a 35 percent stake previously held by Qatar Airways.
The carrier offered to reinstate a working contract, which it has suspended, until the end of 2014 in return for unions accepting a $12.5 million reduction in employee costs next year.
Cargolux also said it would only consider further cost cuts if it didn’t hit the $12.5 million target. It also offered to reimburse $6.25 million of any additional cost savings.
The carrier, which is investing $2.4 billion in 13 Boeing 747-8 freighters, said it still considers an agreement is within reach.
“The airline remains focused on improving its financial sustainability in an industry that is suffering one of its worst downturns,” Cargolux said.