ONE OF Europe’s largest airlines is heading for a storm after its pilots refused to move their contracts to new companies.
The Scandinavian budget carrier Norwegian – which has several routes between Scotland and its eastern neighbours – has claimed it needs to cut costs by re-employing pilots through arms length companies.
In response pilots across Scandinavia have gone on strike, leading to hundreds of cancellations.
Since being re-launched as a budget carrier in 2002 the Oslo-based company has undergone phenomenal growth, adding routes to Dubai, New York and the Far East for Scandinavian holidaymakers and business travellers.
Hans Erik Skjæggerud, head of the Norwegian pilots’ union, told reporters that Norwegian’s behaviour was akin to “having a pistol held to their head”.
The airline’s director Bjorn Kjos is one of Norway’s most successful entrepreneurs and holds a significant stake in the company.
Trading in the airline’s shares was suspended on the Oslo stock exchange yesterday, although the company claim this was not connected to the industrial action.
Kjos himself sold three million shares in the firm, for over 353 million Norwegian kronor.
Collective bargaining systems mean that the Nordic countries often have significantly higher levels of pay and working conditions than in their neighbours.
By establishing arms-length companies to employ staff, airlines and other international companies can both reduce tax liabilities and bypass collective bargaining agreements.
It already has an Irish-based transatlantic subsidiary for similar reasons.
As of Wednesday, Norwegian’s flights across Scandinavia had been cancelled or postponed. The situation was made worse for Norwegian when Ryanair Pilot Group, representing around half the Irish carrier’s pilots, urged its members and other available flight crew not to provide Norwegian with cover.
Some Norwegian flights had however resumed using imported Spanish pilots through its subsidiary air resources.
Norwegian has regular scheduled flights from Edinburgh to Stockholm, Norway and Copenhagen. In the last financial year Norwegian made a profit of €41 million (£2,9611,635).
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