Aeromexico is awaiting permission from a U.S. bankruptcy court to lay off 1,830 employees in a cost-saving move to save $44 million. The Mexican airline requested on Wednesday earlier this week.
Who will be laid off…
According to the court filing, the airline said it is planning to dismiss a total of 766 cabin crew members, 150 of these crew members from its regional branch Aeromexico Connect.
In addition to this, the Mexican flag carrier said it would dismiss 855 union workers who work on ground handling operations, maintenance, and cargo operations. Another 975 non-unionized employees will also be laid off.
Although the cuts will save up to $44 million on a recurring annual basis, it would cost $31 million in severance benefits at first. However, Aeromexico said that the expected outcome will significantly outweigh the program’s initial cost.
How the Unions responded…
Multiple unions backing Aeromexico employees including the pilots union ASPA, cabin crew union ASSA, and ground handling workers union Independencia have raised their voices against the airline’s latest measures.
In a statement the pilots union, ASPA representative said:
“The pilots received an unacceptable proposal (with changes) that look like those of an ultra-low-cost carrier. ASPA is working on a proposal that better suits the cost reductions needed by Apollo Global Management.”
“But, to settle on this subject, first, we have to resolve, with Aeromexico, ten contractual breaches, including a wage increase of 3.78% that was inked in March. So far, the Union has agreed to have 266 pilots temporarily furloughed, plus a general salary reduction of 30%.”
Aeromexico carried 870,000 passengers in October, up 22.9% from the previous month, citing increased demand for international and domestic travel. Earlier, the airline posted a net loss of $130 million in the third quarter.