Reaction to compromise solution proposed by the court of arbitration

27 May 2003

Swiss International Air Lines cannot accept the compromise solution proposed by the court of arbitration. SWISS must retain maximum flexibility to be able to respond to swiftly changing market conditions. The entire air transport industry is currently in the midst of the most severe crisis it has ever faced. If SWISS is unable to determine the size and composition of its aircraft fleet like every other airline, i.e. in accordance with strictly business-based criteria, its very existence is endangered. Proposals whereby long-haul pilots would be dismissed before regional pilots (or vice versa) for seniority reasons are not feasible, either for operating reasons or financial considerations.

SWISS has two separate pilot corps which operate in two different markets with their own distinct conditions. As a general rule, the pilots of smaller aircraft have smaller salaries than the pilots of larger aircraft. All the pilot employment markets in the airline sector operate in accordance with this basic business principle.

If, in the event of a downsizing of the workforce, personnel policy considerations resulted in the dismissal of pilots from the other corps than the one in which such reductions were actually required for economic reasons, these actions would entail massive costs for the company and sizeable problems in operational terms. In the current circumstances – the most severe crisis the air transport sector has ever experienced – these actions would pose a direct threat to SWISS’s very existence.At the same time, however, SWISS is keen to ensure that the pilots of its smaller aircraft should enjoy terms and conditions of employment at SWISS Express which are fair in relation to those at other regional airlines, and to offer these pilots an attractive career model.

In view of these considerations, SWISS cannot accept the compromise solution proposed by the court of arbitration. This proposal envisages, in the event of a downsizing of the workforce, that pilots from both corps should be dismissed in equal numbers – regardless of actual operational requirements.

Whilst the SWISS PILOTS’ Association has voted in favour of the compromise solution proposed by the court of arbitration, it has associated acceptance with conditions which are unacceptable to SWISS, and which go far beyond the proposal put forward by the court of arbitration.

SWISS has asked the court of arbitration to postpone its ruling on the SWISS PILOTS’ complaint until the end of June, by which time the company’s future structure under its new business plan will be established. With market conditions deteriorating further, SWISS will be compelled to make further substantial modifications to its network and aircraft fleet, and thus also to its personnel corps.