Friday, February 26, 2010

Cutbacks and Payback

Travelers in Europe can be forgiven for wondering what the heck has been going on the in last week or so, as furious transport unions have launched walkouts and strikes, or threatened to.

In a word: payback. In several words: payback prompted by cutbacks.

British Airways cabin crew have voted to authorize a strike. Lufthansa pilots walked off the job for a day, then walked back on the job, then said they'll walk out again next month.

French air traffic controllers are spooked by proposals to integrate European nations' air-traffic systems under one regime - what the International Air Transport Association (IATA) calls "a single European sky.'' The French controllers fear this means job losses.

These and other labor actions are payback for staff cutbacks and various austerity measures imposed by cash-strapped employers on their employees.

How cash-strapped? Consider this: Air France-KLM lost 215 euros in the third quarter of its fiscal year. The Spanish flag carrier Iberia - poised to merge with BA - lost 273 million euros in 2009. Other European carriers are also feeling pressure. Scandinavian Airlines could come apart, with the governments of Sweden and Denmark talking about selling their stakes in SAS.

Europe isn't alone. Asian and North American carriers, too, are straining under high operating costs for fuel and security, and low revenue due to global recession, security fears and nervousness about the overblown H1N1 swine flu virus. Japan Airlines is bankrupt. U.S. carriers have bled money and are still downsizing to smaller planes, cutting the number of flights and eliminating unprofitable routes. Part of the cost-cutting in the United States includes slashing pensions, wages and benefits. Employees are understandably angry and afraid.

The simple, brutal truth is that disruptions in service will continue in the foreseeable future, especially in Europe, where organized labor is traditionally strong. What can we as travelers do about that? Not much. Fasten your seat belts: It may well get worse before it gets better.

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