European airlines are cutting more than 2,000 jobs and pushing for extra revenue to beat the industry's worst recession in a decade in a strategy risking winter disruption.
Aer Lingus said Wednesday it will cut nearly one in five jobs and reduce salaries to secure its survival, even if it means seeing off strikes by angry staff.
The loss-making Irish carrier moved a day after British Airways announced plans to cut the equivalent of 1,700 cabin crew jobs, drawing a threat of strikes in coming months.
"Job cuts seem to be extreme and draconian and an overreaction to the current difficult economic climate", said Gerry McCormack, national industrial secretary of the SIPTU union which represents Aer Lingus ground staff.
"The imposition of any compulsory redundancies, cuts in pay or unilaterally imposed changes to conditions or work practices will be resisted," said Brian Gormley, a regional officer at UNITE, which represents technical workers at the airline.
In Spain, national carrier Iberia said it was considering whether to charge passengers for checking bags, borrowing a practice invented by low-cost rivals and which has spread to traditional carriers in the United States.
US airlines have been ratcheting up their bag-check fees though analysts say they risk alienating flyers.
Against a backdrop of projected global airline losses this year of USD$11 billion, United Airlines this week offered passengers the right to check in baggage for a year for USD$249.
Spanish consumer association FACUA said it would sue Iberia if the airline charged for baggage.
Both Iberia and Aer Lingus face threats to their independence due to the shocks battering Europe's fragmented airline industry.
Iberia is in talks to create Europe's third largest airline with British Airways.
Aer Lingus has been struggling to avoid succumbing to 30 percent shareholder Ryanair and warned it may seek more cuts if savings of EUR74 million euros are not achieved by 2011.
"Employees and politicians stand between a rock and a hard place. While difficult to swallow, these proposals offer the best shot at survival and independence," Dublin-based brokerage Bloxham said of the Aer Lingus restructuring plan.
An Aer Lingus employee had a different view.
"We are no fools," he told the national broadcaster RTE. "We know the environment we are in, we know that times are tough, especially in the airline industry, but we had no anticipation of how drastic and how much this is going to affect our working life and our home life."
UNIT REVENUES
Airlines have been reporting signs that demand has begun to stabilize, helping sector shares in Europe recover about a third since their low point in March, led by Air France-KLM.
Air France-KLM said its September traffic fell 3.7 percent, in line with the previous two months, but well below a 9.4 percent slump n March.
It boosted the proportion of seats sold by cutting capacity more aggressively but predicted continued pressure on revenues.
Investors fear capacity could quickly be reinstated as airlines grab at the first signs of recovery. Meanwhile losses are being inflated by price-cutting and oil prices near USD$70.
Singapore Airlines and Air New Zealand reported improving demand this week but cautioned a sustained recovery was still far from certain.
British Airways carried 0.8 percent fewer passengers in September compared with the same month a year ago but the proportion of seats sold rose, it said Monday.
Shares in Finnair slipped after the Finnish carrier said leisure traffic fell 30 percent in September and warned demand was expected to fall further.
Scandinavian airline SAS said yields remained under pressure.
