Hello,
Facts concerning the current situation at Sky Europe:
1) The company still owes its employees some salaries from 09/2008 (now we have 06/2009, so it is over 9 months that the salaries are not fully paid). For the vast majority of flight crews the amounts owed by the company are around 50% from each monthly salary beginning from 09/2008!
2) Salaries for 10/2009 - the same applies as above. To this day the vast majority of the employees have not received the 10/2008 salaries in full (still about 50% owed by the company). The 50% of the 10/2008 salary that was already paid has been paid in the second half of 12/2008.
3) At the initiative of the management, the employees were asked to defer 50% of their 09/2008 and 10/2008 salaries until 03/2009 and 04/2009, respectively. So I have to say, that the employees have voluntarily agreed not to receive the full salaries for 09/2008 and 10/2008 at that time, provided they will receive the deferred amounts in the spring of 2009. Obviously those deferred salaries have not been paid to the employees to this day as agreed. Employees have made the decision (to defer parts of their salaries) back in 2008 when they had absolutely no idea that all of the subsequent salaries will be also deferred against their will and that the deferred payment will not be paid-out to them for as long as 06/2009.
4) Salary for 11/2008 - not paid out at all. Salary for 12/2008 paid in full, sometime at the end of January once the employee unrest and their pressure on the management started to build-up. Hence, we can say that for the months of 11/2008 and 12/2008 on average again only 50% were paid-out.
5) Starting with 01/2009 the company informed its employees that a new payment scheme is being implemented (obviously without even trying to obtain the consent of the employees). The strange scheme consists of the company's attempt to pay-out 50% of the monthly salary of each employee in 4 installments - basically amounting to 1/8th of the salary being paid every week, as the cash flow (passengers pre-paying the tickets for the summer season) permits. The payments arrive on the employee's bank accounts with a relatively high degree of irregularity of +/- several days, sometimes a week is skipped, etc... However, it is true that this scheme allowed a little bit of stabilization and allowed at least a minimum degree of financial predictability in terms of earnings for the employees. Second issue is, that the amounts paid to employees in some cases of the regular cabin-crews amounted to as little as < hundred euros a week.
6) Therefore, those that are hit by the situation the most are the cabin crews, who are forced to live on 1/8th of their salary a week. Payments of per-diems, that form a significant portion of the salaries of the cabin-crews are of course not getting paid for severals moths at a time (last info that I had from last week is that 01/2009 per-diems have not been paid yet).
7) Due to the fact that the company was not fulfilling its financial obligations to its employees many experienced people have left the company, especially the cabin-crews. Unfortunately they had no possibility to take a loan from their parents or the bank to carry-on with their job. The company solved this by hiring new cabin-crews and running them through an accelerated course. Upgrades to Pursers are being made from people, that would otherwise not have a chance to be upgraded considering their relatively loew total experience for a Purser position.
8) Last Wednesday (03-June) the company organized an official ceremonious event here in Prague, during which the latest cabin crew course has been welcomed into the company. I think it is a really nice thing to do for the new employees, but only if it took place for example in the company's office, considering the company's current financial situation. But no, instead it was hosted in one of the most expensive restaurants in Prague's downtown on the Kampa island! So the company claims not to have money to pay the employees, while at the same time it is hosting a party in a very expensive luxury restaurant, sticking to old motto of the CEO (Jason Bitter) "Do not worry, company pays..."...
9) Just to illustrate the level of the salaries issue - some cabin crew employees are owed amounts in the scope of >4.000 Euro/person, while many pilots are owed salaries in the amounts of >30.000 Euso/person! It basically coemes down to the fact, that most of the crews are getting only 50% of their salaries beginning from 09/2008!
Facts concerning the overall situation:
1) Debts wherever one looks. Employee salaries owed for over 9 months of operations; almost 2.5mil Euros owed to the Slovak Government in social security payments the company is required to deduct from the employee salaries; >1mil Euros owed to customers in ticket refunds due to canceled flights and I do not even try to guess the amounts owed to Eurocontrol and to individual airports for the landing and handling fees. Companies that are owed large sums of money by Sky Europe, as well as former employees who are still unpaid, have already started preparing legal steps to send the company into bankruptcy sooner than the management thinks. Articles in the Czech and Slovak media are starting to appear, shedding more light on the company's situation and starting to count the endless amounts of the company's unpaid debts:
Veritele uhani SkyEurope, dluzi miliony korun - iDNES.cz / Creditors are hunting-down Sky Europe - being owed millions of Czech Crowns
2) The crews are intelligent people, therefore most of them can put 2 and 2 together. Once they did that and open their eyes to the facts and to the behavior of the management, they realize that there is not a chance Sky will survive beyond this summer season without the help of an outside investor. Now tell me who would want to invest in a company with assets of approx. MINUS 100 million Euros. This does not add to the motivation of the crews and the overall mood inside the company is quite dull.
3) I have to admit that the management did a good job in handling the crisis that arose due to the leasing company repossession of 6 NG beginning of this year. However, the airplanes that are slowly replacing the wet-leased ones (following the repossession of 6 NGs by GECAS) are in most cases 20-year old pieces that were scrambled by the company from the desert storage in the US - pieces that were already discarded from the fleet of United Airlines. The company does not even deal with such issues that they still keep the US setup of the on-board systems - everything is in pounds instead in kilograms, including the FMS masses and FUEL gauges. When pilots are used to operate in kilograms on one airplane and in pounds on another one, it does not add to the overall safety levels of operations. Especially with the crews being under s lot of constant stress during the last 9 months of operations - constantly worrying how much of their salary they will receive this time; if they will be able to pay their mortgage; how long will this situation carry on, etc...
4) Mass exodus of qualified crew members - both flight and cabin. In March the company saw a resignation of the PRG Base Chief Captain and the Chief of the Cabin Crews, followed by the resignation of the company's Chief Pilot in April - well, I would not want to have their responsibility for the miss-management of the company on my shoulders either.