EBACE Convention News

Union upset over IBM Euroflight closure

 - November 29, 2006, 9:42 AM

IBM Euroflight, the computer giant’s European corporate flight department, is to close down before the end of June due to “insufficient activity.” Its two Dassault Falcon 2000 jets are to be sold and bargaining between management and the unions as to the future of the operation’s 20 permanent employees–including seven pilots and seven maintenance technicians–at its Paris Le Bourget Airport base is at an advanced stage.

Francois Belaygue of the Force Ouvriere union, one of 18 union representatives on IBM’s central works council and a member of the Euroflight union coordinating committee, told EBACE Convention News that IBM stopped all the operator’s flights before informing the council, as it is legally bound to do under French law. [The works council includes union delegates elected by all the group’s employees–not only union members–who sit with appointed management representatives. Management is obliged to consult the works council on all major decisions affecting the workforce, including reorganization and downsizing.–Ed.]

IBM has declined to make any official comment on the future of IBM Euroflight, citing ongoing talks with the unions.

According to Belaygue, under the latest proposals from IBM management, six of the pilots would undergo training to prepare them for jobs with other aircraft operators while the seventh will leave under existing early retirement arrangements. A source inside the company–speaking on condition of anonymity–said that he “strongly believed” some of the pilots in question would be hired by NetJets Europe. The fractional ownership operator, which has several Falcon 2000s in its fleet, has said it is seeking to hire more than 100 pilots in Europe this year.

Belaygue confirmed that IBM Euroflight operations manager Patrick Labeyrie had officially informed the works council that the corporation decided to put an end to Euroflight service because of “insufficient activity.” IBM has two corporate flight departments–one for Europe, and the other for the U.S., headquartered at White Plains, New York. Labeyrie told the council that IBM Euroflight has been transporting passengers at only 25 percent of its capacity.

According to information supplied to the works council, the vast majority of passengers carried by Euroflight were IBM staff and 80 percent of the trips were for internal IBM group meetings. Nonetheless, each of the Falcon 2000s has been logging as many as 800 to 900 hours per year, which by corporate aviation standards is actually quite a high rate of use.

Labeyrie also told the council that IBM’s U.S. flight department is unaffected by the Euroflight closure. He reported that although the operation’s level of activity has remained stable, flight-hour costs have risen while the number of passengers carried has fallen, thus prompting the corporate conclusion that the operation is no longer suited to Euroflight’s original mission.

According to management, Euroflight has its own internal cost structure and must be self-supporting. Nonetheless, Belaygue insisted that: “Euroflight is IBM, the people working for it are IBM employees and the group has responsibility for them.” The union representative said some Euroflight employees feel the economic arguments advanced in favor of closing the flight department do not justify the closure and that the measure was part of IBM’s overall cost reduction and restructuring plan, published last year, which will result in the loss of 13,000 jobs throughout the U.S and Europe.

Belaygue alleged that IBM management has speeded up the consultation procedure with the unions, thereby decreasing the time employees have to find acceptable alternative employment that would allow them to maintain salary levels and health coverage provisions–a situation that may necessitate them taking work outside France. In particular, he claimed that pilots would need three to six months of transition time–allowing time for type rating training–to be able to join another operator. However, if the pilots concerned can join NetJets Europe, the transition may be more straightforward than anticipated.

IBM Euroflight is one of Europe’s oldest corporate flight departments, having been founded in 1960. At the end of 2003, it became one of the first European business aircraft operators to complete the International Standards for Business Aircraft Operations (IS-BAO) certification process.