Air Littoral reorganizes amid labor discord

 - November 26, 2007, 1:03 PM

Air Littoral, one of the troubled French regional airlines once owned by SAirGroup, has found new footing following a hard-fought agreement with employee unions. The deal ended a 48-hour strike that paralyzed the regional airline in September. The unions took strike action over the company’s compensation proposals for employees who stand to lose their jobs in the airline’s planned reorganization. Management threatened to suspend the restructuring plan if the sides could not reach an agreement.

The difficulties began after Marc Dufour, Air Littoral’s chief executive, took over the regional airline from SAirGroup this summer. Before the deal in which Swissair ceded fellow French regionals Air Liberté and AOM to the new Holco consortium, Dufour had served as Air Littoral’s president. Some union representatives attributed the company’s lack of success partly to Dufour, and expressed concern that his management style would lead to a repeat of past failures.

But the airline and the joint union committee, representing all categories of employees, came to an agreement on redundancy payments to the 127 employees who stand to lose their jobs following the takeover. The number of expected job losses originally totalled 217, but 90 employees, most of them administrative and commercial staff, managed to find jobs elsewhere, many of them with Air France. Air Littoral’s original workforce of almost 1,200 now totals less than 1,000.

The sides agreed that ground staff and administrative personnel losing their jobs will get 1.5 months of salary for each year of service with the airline. Pilots and other airborne employees forced out of their jobs will receive 1.75 months of salary for each year with the company. Dufour said that the terms of the agreement were a considerable advance on the original proposals and constituted a “more dignified package for those having to quit the company over the next few weeks.” The agreement also improved payments for 160 company employees who will have to relocate following the airline’s decision to concentrate its ATR 42 fleet in Montpellier and its CRJs in Nice, its two hubs.

The airline intends to keep a fleet of 32 aircraft, including 17 CRJs, 10 ATR 42-500s and five Fokker 70s. In all, it will shed four ATR 42-500s, six Beech 1900Cs, two Fokker 27s and one Fokker 100.

With the agreement signed and the present conflict over, the workforce now backs Dufour’s two-year plan to return the airline to financial health. Air Littoral plans to increase its capital by FFr835 million ($111 million) and restructure its existing network, axing about one-quarter of its routes. However, new routes such as Paris Orly to Béziers in southwest France and the short route between Béziers and Nîmes were to open at the end of September. The airline hopes to transport two million passengers next year.