The Spanish tourism group Globalia has communicated that it’s discussing to implement a Temporary Layoff Plan (Expediente de Regulación Temporal de Empleo, ERTE) in light of a drop in demand in the autumn-winter (boreal) season. The measure will affect around 9,000 employees. This represents a 60% of total employees.
According to El Confidencial’s sources, Globalia intends to initiate a negotiation process with the unions to apply an ERTE for economic reasons (known as ETOP) in all the group’s subsidiaries due to the decrease in post-holiday bookings and the lack of guarantees for the extension of the ERTEs approved by the Spanish government during the pandemic.
In the case of Air Europa, the crisis impacted its long-haul flight operations due to border restrictions as part of Covid health protection measures, causing constraints in its most important markets in Latin America: Argentina, Brazil, and Peru, and in North America to the United States. The airline was involved in the controversy for the governmental aid from the Sociedad Estatal de Participaciones Industriales (SEPI), which granted it loans for 475 Million Euros.
Air Europa’s employees, including cabin crew, pilots and ground staff, rejected months ago a new 6% salary reduction. The union questioned the adjustment, citing as an example, the high salary of the company’s new board members.
Iberia, part of the International Airlines Group (IAG), is also in negotiations with the unions to include more than 5,000 employees.
Iberia-Air Europa merger in jeopardy
The economic situation of Spain’s main long-haul airline operators may call into question IAG’s acquisition of Iberia and Air Europa’s merger to strengthen their operations at Adolfo Suarez Madrid-Barajas Airport.
The European Union, through the Commission for the Defense of Competition, also indicated that there are other difficulties to be resolved in relation to the dominant position that the joint operator would have in the Spanish market. One of the decisions would be to cede slots (landing and take-off slots) to Low-Cost competitors such as Ryanair, which would harm operations and eliminate their competitive advantage, making the idea of the merger less attractive.
