The Scandinavian airline Norwegian plans to lay off 85% of its workforce of pilots and cabin crew in Spain, which would affect a total of 1,191 workers, company sources confirmed yesterday. It thus becomes the first airline to propose an ERE in Spain after the pandemic crisis, which keeps the aviation sector below historic lows. If confirmed, it would also be one of the largest employment regulation files for the airline industry in the country, after the one carried out by Iberia almost a decade ago.
The decision comes after a year of intense financial turmoil for the company led by Jacob Schram, with a public bailout from the Norwegian Government, bankruptcy proceedings and restructuring of its debt, which at the end of last year exceeded 3.7 billion euros .
But the precarious situation that it drags has not avoided the surprise and anger of the staff in Spain. “That we would have an ERE could already be seen to come, but we did not imagine this magnitude,” comment union sources. The unions Sepla and USO yesterday rejected the airline’s plans and regretted its intention to permanently close three of its five bases in Spain, that of Barcelona, Gran Canaria and Tenerife South, just before the summer and when the process of vaccination across Europe begins to accelerate. Norwegian would only maintain the Malaga and Alicante bases with one plane each this summer, which would be expanded to three per base in 2022.
The biggest blow will be the El Prat airport, where Norwegian has to date its largest base in Spain, with more than 600 workers, almost half of the entire workforce in the country. At the beginning of January, the company already announced that it was abandoning intercontinental flights, where Barcelona had played a crucial role since 2014, when it began its long-haul operations at the airport. This step already augured an uncertain future for part of its staff, fears that have been confirmed and extended beyond what was expected by employees. The proposed layoffs would also affect crew members working on short and medium-haul routes. However, the company plans to continue flying to Barcelona from its bases in the Nordic countries and maintain a part of the administrative services in the city offices.
Consequences of ere
The Government will evaluate if the company has to return money from the ERTE that it has applied
Norwegian encompasses its layoff plan within a process
of global restructuring to avoid the bankruptcy of the company. Company sources indicate that the workforce reduction is taking place “in each and every one of the markets” where it already had operations: the Nordic countries, the United Kingdom, the United States, Italy and France. The forecast is to drastically reduce its operations in all markets but to preserve
vary the staff and bases in Norway and the other Scandinavian countries to the maximum. “We know that they are hiring personnel in those countries while here they want to dismiss almost the entire workforce,” complain representatives of the workers.
The unions are also awaiting the government’s analysis of the future ERE. The majority of the workforce in Spain has been in ERTE since March 2020. If the layoffs are made, the Government will assess whether the airline has to return the exemptions from which it has benefited by having availed itself of a temporary employment regulation file. It is expected that the negotiating table between the company and the unions will be formalized today and from there they will be given a month to conclude the talks.
The unprecedented drop in air traffic due to the pandemic has finished dragging Norwegian, which was already accumulating a delicate financial situation before the covid crisis. After the social tsunami caused by the virus, the airline barely carried 6.9 million passengers last year, 81% less year-on-year.
Its economic position worsened in 2019 due to the temporary flight ban of the Boeing 737 MAXs that make up its fleet and problems with the Rolls Royce engines. The pandemic did the rest. In mid-December 2020, it obtained the support of its shareholders for its transformation plan, which includes the issuance of new shares and debt conversion, after having received the approval of the Irish and Norwegian courts for a double restructuring process. In Spain it is in a pre-competition situation.
Its largest base in the country
Barcelona, with more than 600 pilots and cabin staff, closes but offices and flights continue
Meanwhile, Norwegian’s competitors are already beginning to take advantage of their weakness and the closure of the Barcelona airport base. Vueling and Ryanair have entered into strong competition for the Nordic market from El Prat. The l owcost IAG will operate four new routes. Specifically, the company will fly from Barcelona to Gothenburg (Sweden), Billund (Denmark) and Bergen and Stavanger (Norway). The Irish Ryanair will also open a new route with the Danish city of Billund.