El Al Seen Negotiating with Restive Pilots

May 10, 2022
Although there is a labor agreement with the pilots in force, El Al's management realizes that things could get out of hand, and a meeting is expected to be held with the pilots.

May 9—The planes have returned to the skies, for the time being, but the ground at El Al is burning. Eleven of the airline's flights were canceled last week. For the first time since 2018, passengers received messages telling them that their flights had been cancelled due to "operational circumstances".

The reality behind that bland phrase is that no pilots turned up for the flights. Although there is a labor agreement with the pilots in force, El Al's management realizes that things could get out of hand, and a meeting is expected to be held with the pilots today. The management intends to enter into negotiations, and it can be presumed that the pilots will receive at least some of their demands.

The cancellation of eleven flights, and the refund of fares plus compensation of NIS 1,000-3,180, depending on the length of the flight, will cost El Al millions of shekels. This does not take into account lawsuits for losses caused to passengers by the cancellation of flights at short notice, such the cost of hotel bookings and so forth. So besides the passengers' distress, this is a matter of financial distress for El Al at a pretty dismal time.

The passengers, whose faith is a crucial component of the recovery of El Al from the hole it sank into because of the coronavirus pandemic, along with the rest of the aviation industry, were unsparing in their justified criticism of the disruption to their plans. Murky relations between airline managements and their pilots are not exclusive to El Al, and the cancellation of flights as an act of protest is not a rare phenomenon in the industry, but a different notification might perhaps have mitigated the anger.

A plane left standing on the ground also has operational implications for maintenance crews. Their anger at the pilots is longstanding, and it doesn't take much to rekindle it: leaving eleven planes on the ground is certainly enough.

The maintenance workers responded with an act that could easily be considered a direct insult to El Al's new CEO Dina Ben-Tal Ganancia, but as far as they were concerned it was directed straight at the pilots: the cancellation of El Al's participation in the Independence Day fly-past. El Al called the incident "serious" and said that it would be investigated to ensure there would be no repeat of it, expressing regret that " El Al was prevented from taking part in the festive fly-past on Independence Day."

Meanwhile, El Al is trying to reassure passengers and investors. In a notice to the Tel Aviv Stock Exchange, it stated: "From May 6, 2022, the company returned to operation in accordance with its planned flight schedule." The question is, how long will the peace last?

Labor agreement core of dispute

El Al employees were aware that under the surface things were starting to bubble. Even before the flight cancellations, they begged the pilots not to disrupt the flight schedule and harm customers' confidence at a time when El Al was enjoying growing demand for flights as the summer approaches. It should be pointed out that the actions that led to the flight cancellations were not part of a declared labor dispute. As far as the pilots' union is concerned, "the pilots are acting in accordance with the labor agreement in force."

The agreement, signed in 2018 after a stand-off between the management and the pilots, brought the pilots' terms of employment into line with international aviation standards. It was replaced in 2020 by a new agreement designed to deal with the effects of the coronavirus pandemic. That agreement, in force until 2026, provides for a 31% cut in the pilots' basic pay and a 39% cut in their expense allowance for stays overseas. El Al currently employs 500 pilots. Before the pandemic, the number was 670.

The pilots had their pay cut, but the rest of El Al's workforce was downsized. In its talks with the Ministry of Finance on aid during the pandemic period, the airline was required to present a deep streamlining plan that would enable it not only to stay on its feet but also to service the debt that it had taken on to the tune of hundreds of millions of dollars. The agreement stipulated that El Al would part from a third of its workforce. More than 2,000 people were laid off (or left voluntarily), and today the company employs about 4,000 people. The wheel turned full circle, however, and now El Al is hiring hundreds of people, mainly in customer service, which it urgently needs to improve.

Leveraging the improving trend

The pilots, who see the airline on an improving trend, as demand grows for flights and vacations, seek to update the agreement they signed. They see that the administrative sector has already restored to itself its salary level after a 20% cut during the pandemic period; they see people being recruited at higher pay levels than in the past; and they see their colleagues at other airlines back to their previous pay levels.

The pilots also see the incentives given to other workers at the airline. El Al will award a NIS 2,000 incentive payment in the technical and maintenance sector, an outcome of its recovery and the shortage of manpower that has led to higher workloads.

In another announcement El Al's administrative workers were informed of the cancellation of the pay reduction forced on them during the pandemic, and on a welfare program budgeted at NIS 200,000. The administrative workers will receive a grant of NIS 1,200 each together with improvement in their terms of employment.

The pilots are in a different situation. They are shackled by an agreement that they could be said to have signed under duress. Why? Here, a further bone of contention emerges: since 1982, El Al workers have been represented as a single bargaining group.

Unlike at other airlines, the pilots at El Al are not represented by an independent union, and they therefore feel that agreements, such as the latest one signed, are not made in accordance with their position but in accordance with the interests of other groups of employees who do not regard them favorably.

The pilots seek to return to the 2018 agreement, at pay levels that according to them will reflect El Al's business recovery. Reopening labor agreements is something that does happen — the question is whether it will happen at El Al.

Avi Edri, chair of the transport workers union at the Histadrut ( General Federation of Workers in Israel), does not see that as something up for discussion in the near future. "It took us a very long time to stabilize the company," he says. "We won't allow any collective action of any kind that could harm El Al."

Indeed, to reopen the pay agreement would require two to tango, and in this case even three — the Ministry of Finance would have to approve any change in the pay conditions of any section of El Al's workforce.

On the idea of a separate union for the pilots, Edri says, "This was a decision made at the time by the court, after the fragmentation of the workers into different unions brought the company to its knees. El Al works with one bargaining unit."

Published by Globes, Israel business news — en.globes.co.il — on May 9, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.


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