Saturday, March 2, 2024

AIR SERBIA: 20% OF THE STAFF TO BE DISMISSED

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On November 10, the management informed the staff about a new program of voluntary retirement, promising a redundancy package better than one prescribed by the Labour Law. At the same time, they announced a decrease in salaries from December to March next year, the exact amount of which would vary depending on the position held in the company. Although the news is still to be officially confirmed, the calculations hinting at 300 redundancies have already been made.
The company justifies its behavior by the fact that in spite of their past effort to reduce the expenses and thus mitigate the effects of the corona pandemic, the costs grew so high that they have become unbearable. Still, the dismissals are happening at the time when 150 million euros from Serbian budget are being conceded to Air Serbia to cover the cost of credits that are to be disbursed this year and compensate for the losses that company could suffer next year due to the never-heard-of-before crisis in the air transport. Although it’s not known whether this move was autonomous or caused by the pressures coming from the government, the experts agree that it was done too late. Other companies did it long ago. The Emirates, for example, dismissed 50% of the staff without reducing the salaries, while some other companies reduced all salaries by 40% to 60% without dismissing anyone. The exception is the Wizz air, which is planning to substitute a number of other companies on the European market.
It was clear from the beginning that the pandemic would not stop quickly and could make the crisis last until 2022 or even 2024, say the experts. This year the general turn-over suffered the 40% to 50% decrease and the winter will be a full disaster. The companies calculated that it would not pay off to keep the redundancies for two or three more years and decided to dismiss them. They know very well that after the crisis is over they will find them again on the labour market and pay them less than now because of their fragile position.
Our economist Milan Kovacevic does not share that conviction. He thinks that many of the employees who opted for the voluntary retirement scheme will be badly needed by the companies in the post-corona times and might ask to be paid more than before. While criticizing the lack of transparency concerning the expenses not related to the labour cost, he is also skeptical about the capability of public enterprises to analyse and foresee the future development and needs.

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