Is the looming merger between El Al and Israir Airlines and Tourism Ltd. one of the main reasons for the disruptions in El Al Israel Airlines Ltd. (TASE: ELAL) flights in the escalating struggle between management and the pilots' committee? Last January, El Al announced its board of directors' decision to step up its checks for pushing the deal through (through El Al's Sun D'Or subsidiary). Sources inform "Globes" that the head of the Israir pilots' association met with El Al CEO David Maimon , probably to discuss the terms for employing Israir's pilots after the merger. Meetings were also held between the pilots' associations of El Al and Israir. Six years ago, incidentally, a collective agreement was signed by the Histadrut and Israir management. Israir is an Israeli airline that finished 2015 with a NIS 25 million profit, the first profit in its history. Last October, Israir hit a peak, reaching second place in passenger traffic (after El Al) with almost 93,000 passengers (incoming and outgoing), 135% more than in October 2014. Israir's fleet consists of five airplanes. Most of its business is as a supplier of vacations and flights, mainly using planes leased from other airlines.
Some believe that El Al pilots are afraid that El Al will increase its business using leased planes through the "back door, with the addition of a few percent" to the employment terms of the new pilots expected to enter the company following the merger, if and when it takes place.
El Al pilots, like other pilots around the world, feel threatened by the aviation regulations that will take effect in May 2018. These regulations limit flying hours to an average of 83 hours per pilot, compared with a current minimum of 75 hours, which rises with graduated overtime hours. El Al pilots sent a letter demanding an aggregate NIS 270 million annual salary hike, reflecting a 60% increase in their base pay. Over a decade, this amounts to an additional NIS 2.5 billion. In this context, the pilots' committee stated, "The 60% addition to base pay reflects a conversion of 50% of the 60% from overtime to base salary. In other words, the real increase is less than 10% (7%). Management has already agreed to a 55% increase, which is really just a few percent."
In response, El Al asserted, "If it takes place, an Israir-Sun D'Or merger will be a strategic measure that will not only not detract from El Al's business, but will increase it. This merger will not cause a single layoff at Sun D'Or." Israir said in response, "As previously reported, negotiations have been taking place between the companies for a long time, sometimes more intensively and sometimes less. If there is something new to report, we shall do so in an orderly way." The El Al pilots' association said in response, "There was no meeting on this specific issue. Regular meetings are conducted in the framework of the pilots' union. We very much hope that management's disruptions of flights are not being done for this reason."
On Thursday, the Knesset Economic Affairs Committee will convene for a discussion of current events in El Al, meaning the dozens of disrupted and canceled flights caused by the dispute between management and the pilots' association. Economic Affairs Committee chairman MK Eitan Cabel (Zionist Union) announced that before the discussion, he planned to meet with both sides separately in order to narrow the gap between them and end the crisis. Tomorrow, before the Knesset session, all El Al employees will gather for an emergency meeting as part of a labor dispute proceeding, which requires a vote of all the employees in order to approve it. "The livelihoods of hundreds of El Al employees are in jeopardy over the coming year. El Al management is not considering the thousands of invisible El Al workers earning a pittance," the committee stated, emphasizing, "El Al management is trying to conceal from the public the truth about the state of El Al's workers, and therefore announced that it would not allow media coverage of the emergency meeting."
Published by Globes [online], Israel business news - www.globes-online.com - on November 20, 2016
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