Finnair Considers More Prolonged Layoffs

Finnair has announced that it will begin talks with employees over potential long-term layoffs. The airline has said it expects it will not be operating at full capacity before the end of this year and that it will have to reflect this in its workforce. Talks are due to begin on May 25th.

Finnair grounded aircraft
Finnair aircraft sit grounded at Helsinki due to a lack of demand. Now, the airline is considering more permanent staff layoffs.  Photo: Getty Images

Finnair will start discussions with employees next week as the impact of the outbreak threatens operations for the rest of this year. The airline cut operations by 95% throughout April, May, and June and now hopes to increase operations to 30% in July.

However, Finnair believes that, by the end of 2020, it will still only be operating 70% of its planned flights. With this drop in demand comes the necessary cutbacks. As there is less work available and staff salaries are a significant cash expenditure, cutbacks are not a surprise.

Finnair A350 on ground
Finnair has already placed staff on temporary leave. The Finnish government allows them to extend this for an indefinite period, which may prompt staff to leave permanently. Photo: Finnair

Initially, discussions will center around the 6,100 Finnair staff in Finland. But the conversation will then be extended to consider staff based outside the country. Some personnel have already been temporarily laid off. According to Finnish law, the airline can put staff on temporary unpaid leave for an indefinite period.

Ongoing discussions

Finnair is yet to announce any real details regarding compensation, early retirement, or even a time frame. The lack of clarity is because, until the airline can get to grips with how many staff could be persuaded to take unpaid leave or early retirement, it won’t know how many workers will need to be furloughed or laid off.

Johanna Karppi, SVP for People & Culture at Finnair, commented that “considering the uncertainties caused by travel restrictions and the coronavirus situation in general, the return to normal will take a considerable time.” Hence the lack of clarity regarding the timeframe. Currently, Finnair’s statement says “that if realized, the layoffs could be temporary for a fixed period of time or until further notice.”

An extended return to normalcy

Like other airlines, Finnair now realizes that extended travel restrictions and passenger worries mean that a normal schedule is a long way off. Finnair is reasonably late in announcing the layoffs, which it now says are “inevitable.” Previously, it has been floating the idea of temporarily furloughing its pilots as it suffered losses of €2 million ($2.1m) per day.

Finnair
Finnair suffered huge daily losses for the first quarter and is relying on a loan from the Finnish government. Photo: Getty

However, this new set of discussions will include all workers. This shows how seriously the airline is looking at the long-term impact. Other Scandinavian carriers such as SAS and Norwegian have said they don’t expect to return to the 2019 level until at least 2022. Both airlines have made staffing cuts.

Conclusion

While Finnair is insisting that the existing furloughs are simply being extended, it seems unlikely that staff laid off for an indefinite period would be willing to return in a few years. The layoffs may be called temporary, but some staff are expecting to lose their jobs for several years. It seems like just another name for a more permanent solution.

What do you think of Finnair’s decision? Is this just another name for permanent layoffs? Should staff be prepared to return in a few years’ time? Would you wait that long?

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