June 5, 2020 at 12:00 PM
As you are aware, Canada's aviation industry is still operating under imposed travel restrictions. The pandemic continues to plague the industry in ways we never could have imagined or prepared for. Many airlines have completely suspended operations, while other carriers have downsized their fleet as a result of reduced demand. In Canada, some companies have made the decision to no longer participate in the Canada Emergency Wage Subsidy (CEWS) program and have already initiated permanent layoffs and/or furloughed staff.
Unifor has met via teleconference with the company three times in the last week to review the effect COVID-19 has had on Flair Airlines. The discussions with the company have been open and constructive and we believe management has been transparent with us. The management team has been providing an updated overview of company operations and the effects the pandemic is having on its bottom line. The flight schedule has been significantly reduced due to load factors, which in turn has impacted company revenues. Charter flights that the company had expected to operate out of South America have also been placed on hold. These types of hurdles are impacting almost all air carriers worldwide, making the situation fluid at best.
Additionally, the company has been actively pursuing a loan from the Federal Government for the last number of weeks. However, that exercise (to date) has yielded no commitment, and there is no guarantee that money will be forthcoming.
Due to concerns with cash flow, Flair Airlines has advised that they need to take drastic measures in order to protect the survival of the company. As you know, there have not been any layoffs or furloughs of any of its’ Pilots. Unfortunately, this will change on June 6, 2020 when the company will initiate the first round of layoffs. The company did provide the union and the Pilots with a thirty-day notification back in May, 2020. Following a company board meeting on Tuesday, June 2, the decision was made to pull out of the CEWS program effective June 7, 2020. Pilots impacted by the June, 2020 layoffs will be placed on furlough and will be eligible to make an application for Employment Insurance (EI). Benefits will continue until the end of June, 2020.
Unfortunately, the company has advised us that a second round of layoffs will be issued in the near future. Again, we have ensured that a 30-day advance notice will be provided to the Pilots who will be impacted on, or around, July 6, 2020. This set of layoffs will only allow members access to EI benefits and not the CEWS program. The total number of active Pilots remaining after the second round of layoffs will be sixteen. It is important to note, if you apply – and are approved for a leave of absence – you will not be entitled to EI benefits.
CONCESSIONS / PROFIT SHARING
The company has approached the union to inquire if there would be any interest at looking at cost saving measures/concessions. Unifor was first advised that non-unionized employees would be taking a wage reduction anywhere from 10% to 20%. However, as the week progressed, this percentage has increased up to a 25% wage reduction. We have addressed a number of concerns regarding concessions for our unionized members. Foremost, Unifor has not had the opportunity to review Flair Airlines’ financial statements. As such, the union has requested to review the financial statements in order to analyze and evaluate if there is a viable plan for recovery. If the union is to entertain cost saving measures/concessions, members in return would need to be part of a profit-sharing plan/employee purchase program which would need to be agreed to. The Union briefly explored the idea of zero wage reductions and the potential of looking at aspects of the collective bargaining agreement whereby it provided the company with increased flexibility and associated cost savings to these potential change(s).
On Tuesday, June 2 the Flair Airlines board approved the concept of a Pilot share purchase plan/profit share concept. However, at this time we do not have any details of what is being proposed. The company did state they are able to put the plan(s) in place in lieu of concessions. To date, Unifor has not made any commitments to Flair Airlines, other than to explore all options available.
The company and union are in the midst of scheduling a meeting in order to review the financial records and discuss next steps. If and when Unifor is convinced there is some optimism to a viable scenario, we will determine if there are ways in which to temporarily assist the company and help manage their cash flow concerns, while still focusing on the well-being of our members.
If there were to be changes (which would potentially impact the salary and/or working rules within the Unifor-Flair Airlines collective bargaining agreement) the union would organize a video conference with all of our Pilots and outline the details. In return, you – the membership – would vote on accepting or rejecting the proposed changes. No changes to the collective bargaining agreement would take effect unless fifty percent plus one (50%+1) of the votes are in favour of acceptance. All bargaining unit members – those who are actively working, those who are on an approved leave of absence and those on layoff status – would be eligible to vote. As of today, Unifor has not agreed to make any change to the collective bargaining agreement.
We will continue to keep you up-to-date as we jointly navigate through these extraordinary times.
For more information, please contact:
Ashley Watkins, Assistant to the Local 2002 President
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