Iberia pilots must be hired at 40 percent lower pay, rules arbitrator

Low-cost sister airline should be restricted to short- and medium-haul routes

Iberia planes parked at Madrid’s Terminal 4 at Barajas International Airport.
Iberia planes parked at Madrid’s Terminal 4 at Barajas International Airport.Carlos Rosillo

Beginning from now, starting off as an Iberia pilot will be much less advantageous than before, according to a government arbitrator.

Jaime Montalvo, who was hired by the Rajoy administration in April to mediate the conflict between pilots and the carrier over the creation of the low-cost airline Iberia Express, has ruled that new pilots will be hired with 40 percent lower salaries.

Officials at Iberia and the pilots union were analyzing the arbitrator’s latest ruling, which would stay in force until the end of 2014 and can still be challenged by either side of the parties involved. The most controversial point in the set of proposals is the introduction of similar pay scales for Iberia and Iberia Express pilots.

The offer by Montalvo, which was first reported by Cinco Días on Wednesday, would establish a starting base salary for commanders at 34,400 euros as opposed to the 88,906 euros annually they are entitled to. After 13 years on the job, those salaries would be hiked to 91,803 euros as opposed to the 146,128 veteran pilots now receive.

The judgment by the arbitrator doesn’t refer to any reductions in pay for the 1,441 pilots who currently work at Iberia, something which the company had proposed last month in its restructuring plan. Iberia and its parent company IAG want to drop salaries between 25 and 35 percent for the entire workforce and lay off 4,500 employees worldwide, including 537 pilots.

“This judgment — although we cannot ignore the economic and organizational circumstances as part of its framework — does not in any way provide a launch pad for an eventual solution for a restructuring plan,” Montalvo said.

This is the second judgment issued by the arbitrator since the labor conflict began over the creation of Iberia Express, which began operations in March, causing a series of strikes and groundings that have been financially painful to the formerly state-owned carrier. Last month the High Court annulled the first judgment that was presented in May because no representative from Iberia Express took part in the negotiations.

This latest arbitration agreement tries to unite the structures of the two carriers, including a way for co-pilots from Iberia to become pilots at Iberia Express if there are any vacancies.

Another important part of the ruling restricts Iberia Express’s flights, which cannot surpass more than 25 percent of its parent company. The low-cost carrier’s service will also be limited to short- and medium-haul routes, with flight times of no more than six hours.

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