Hard times for Norwegian

[737lpa]

Originally Posted by Paul737

Is that your guess or your wish?

My wish is that none of this would have happened. And that norwegian, like most other companies, would have sit down with their many unions to downsize or even close but according to regulations, CLA's, MSL, binding declarations, social responsibility, a severance package iaw local laws, a clear pathway to return to duty when possible iaw MSL and not by asking to resend your CV as if they didn't know you, and basically with some dignity.

My guess is that they're going to be crushed in court for not doing the above, and that the new owners are not going to like the fact that such court proceedings were not disclosed during their sales pitch for their support.

And that's why they kept us all connected and supporting to make it look like we were such a unified workforce of "red nose warriors" when now the only thing that's left is a complete torned down staff, who feel betrayed in most bases, and who are obviously seeking protection from a judge with no delay.

[Meester proach]

Surely the whole point of agencies was to avoid “ social responsibility “. Otherwise what purpose did it serve ? You were a service provider , nothing more .

I wish you luck with any form of recompense but I hold out no hope

[calypso]

Can a fully owned subsidiary claim to be just an "agency"? Nice try but I doubt the Labour Court will see it that way.

[Kirks gusset]

Notwithstanding the moral issues, or indeed the accountability of the CEO in these matters, the legal position extracted from general corporate laws in the USA state:

While a strong presumption in the law exists to protect a parent company from employment claims by subsidiary employees, a parent company seeking to avoid liability should ensure that it does not appear to dominate employee relations of its subsidiary. The employment relationships at the subsidiary level should operate independently and outside of the control of the parent company.

As we may be aware, global corporate laws vary, however in general tend to harmonise to avoid companies "county dodging " to their own advantage, Tax Laws are a completely different scenario.

Now in Europe

(Council Regulation No 1/2003, Art. 23(2))

1. The conduct of a subsidiary may be imputed to the parent company in particular where, although it has a separate legal personality, the subsidiary does not decide independently upon its own conduct on the market, but carries out, in all material respects, the instructions given to it by the parent company, having regard in particular to the economic, organisational and legal links between those two legal entities. In such a situation, the parent company and its subsidiary form a single economic unit and therefore form a single undertaking. Thus, the fact that a parent company and its subsidiary constitute a single undertaking within the meaning of Article 81 EC enables the Commission to address a decision imposing fines to the parent company, without having to establish the personal involvement of the latter in the infringement.

Should the court adhere to the European laws, then pretty much game over

[BehindBlueEyes]

Without oversimplifying the issue, if an employee did something that brought the company into disrepute whilst representing Norwegian, then presumably, the issue would be between NAS and that person - not a third party? For example, a pilot making any decision is acting as an agent for Norwegian - not OSM et al.

Furthermore, surely there is an ‘implied contract’ between between an employee and Norwegian even if OSM handle the admin?

[Smooth Airperator]

Rishworth, GlobalCrew or OSM (or whoever the heck it was that employed me during my short tenure) have everything covered. Lots of people will claim Norwegian was the actual employer because it was Norwegian that dictated the schedule, provided the uniform and all materials (including iPad/phone allowance) but they're wrong. The "employment" test (at least in the UK) is only used to decide your tax status as a contractor, not there to help you in any way. But I'm happy to be proven wrong. It would seem an agency employer can put put whatever they like into an employment contract these days. If you sign it, unless there is specific written legislation saying that can't do something, you have no recourse. Below is a snippet of my contract.

[Kirks gusset]

The UK workers have not made the same claims against the company as the Unions are attempting in Spain. OSM UK is paying staff according to the furlough scheme, and like thousands of other UK based airline crews this appears to be the norm, people are accepting it, at the moment, even BA has indicated it will provide only the minimum severance pay, not enhanced redundancy packages.
The unions in Spain are trying to insist the crews there were de facto employees of NAS and thus entitled to certain termination conditions according to Spanish employment laws.
Forgetting the A-typical employment practices, the UK are used to this type of "agency agreement" and as far as we know no pilots are trying to go down a similar route to the Spanish.
At the end of the day the UK jobs have gone and if the crews can at least get something that's better than nothing. The rest of Europe appears to be paying circa 5000 euros a month whilst the companies furlough, but it varies from state to state

[737Driv3r]

Kirks gusset;

Everyone in Spain is employed by Norwegian Spain( NAR Es) and not by agencies. They were forced to change that. Ryanair just lost a court case in the Canaries crews and if Norwegian tries the same they'll loose too also because Courts in Spain are usually employee friendly and are familiar with these ""schemes".

[vikingivesterled]

There are strong speculations in the norwegian press that the low interest of Norwegian's current management, and specially the chairman, in commiting to sign up for new shares is a signal of changes to come. One newspaper said the chairman's 10k euro equivalent spend would be less than his garden furniture budget for the summer.

[nolimitholdem]

I see my earlier reply was deleted - no reason or notification given. Just disappeared, wow. Interesting, and telling.

I wish SEPLA well in their fight. But they cannot "win", as even if the labour-friendly Spanish rule in their favour, my prediction is NAS will simply bankrupt the company and they will get nothing.

And perhaps the best outcome anyway.

I hope the state Unemployment benefits in Spain are better than the Furlough benefits.

[737lpa]

I´ve also had some posts deleted and I don´t know why. I´m hoping for a technical glitch rather than censorship.

In regards to the above, is not that simple. NAS indeed can bankrupt their Spanish subsidiary (NAR ES) anytime the same way as you can go now and rob a bank. But there are consequences for breaking the law. In the former, if a judge hands down a sentence to NAS requiring them to consider NAR ES employees (1300 spanish crews) as their own, then it will make NAS liable for paying the severance and redundancy claims as per spanish law. Obviusly you can still go and disobey a court sentence, but then, like in any other country, impounding procedures start, including the seizure of property like aircraft landing in Spanish soil and other assets in order to comply with the judgment.

Spain is not the old west. And when they bite, they don´t let go that easily I´m afraid...

[Kirks gusset]

Virgin are planning on hoovering up the capacity with extra destinations and flights from LHR in 2021, that's assuming they survive!

Meanwhile, in the bank market, loan-to-value ratios going into the crisis were as high as 85%, albeit for safer credits than Norwegian. On the basis of less-bullish appraisal values on the aircraft, those ratios were above 95%, even before the coronavirus crisis, according to one aviation finance consultant working for German clients.
.

For NAS it's not if, but when the cash runs out, and it may be very difficult to access further funds meaning the survival plan may already be in jeopardy.

[polax52]

You've got cheap aircraft, cheap fuel, Gatwick slots, historically low interest rates on financing, and sadly- cheap crew. And out of Gatwick you have a profitable business. Somebody is going to come in and pick up the pieces post CV.

[BehindBlueEyes]

Thats exactly what I said several posts ago.

Maybe the new American and Irish owners will realise it makes no sense to be paying for idle aircraft next Monday?

[dirk85]

Originally Posted by polax52

You've got cheap aircraft, cheap fuel, Gatwick slots, historically low interest rates on financing, and sadly- cheap crew. And out of Gatwick you have a profitable business. Somebody is going to come in and pick up the pieces post CV.

All you need now is passengers and a working business model, and bob is your uncle

[Kirks gusset]

https://www.forbes.com/sites/willhor.../#27e60e587cdf

Flybe sold 25 Gatwick slot pairs to EasyJet for £20 million in 2013 while EasyJet last November spent £36 million on former Thomas Cook slots for 12 pairs in summer, eight in winter plus additional slots at less congested Bristol. Norwegian last September securitized a loan with $380 million worth of Gatwick slots.

The real values of the slots have fallen dramatically in 2020, no NAS flights, no BA, no Virgin, perhaps even a reduction in TUI flights we could be looking at something like 35% of the slots becoming available this summer (what's left of it!) and a fire sale. GAL can reduce their overheads simply by closing one terminal but the airlines are still left with fixed costs for parking, maintenance and movements.

If you are an airline depending on the collateral value of these you will be in trouble. BA don't care they just want to protect their LHR position and Virgin will re-group there if they continue. If Wizz move into LGW they will be a tick in the side of Easy, but EJ does not have the cash to pick up the extra free slots at this time.

[737Driv3r]

As expect Spanish politicians will back up the workers if Norwegian wants to pretend they don't "know anyone"


e24.no/naeringsliv/i/e8Vnml/spansk-politiker-stoetter-fagforeninger-i-sak-mot-norwegian

[PilotLZ]

As harsh as it may sound, but the world will not be standing still and waiting for Norwegian to complete a rather vague for now turnaround plan which is estimated to take upwards of one year. Lots and lots of things can happen by then. Think a Wizz air base at LGW, Virgin Atlantic return, easyJet utilizing some of the now vacant LGW slots unless Sir Stelios gets his way, possibly additional Ryanair flights on the routes which proved to be profitable with Norwegian... All the profitable bits and pieces will be snatched up by the stronger ones - leaving what?

[BehindBlueEyes]

https://www.aa.com.tr/en/asia-pacifi...n-air-/1847944

Didn’t see that coming! Why would a Chinese company (and ultimately the Chinese government) be interested in a struggling Western airline? Or is this standard practice?

[737lpa]

Well is not like they bought shares on their own. It's the result of the swap for equity between lessors and bondholders.

In the case of China is thru one of the main lessors which, indeed belongs to the Chinese government.

Next few months will be interesting as the interest of the lessors (now also the owners) is to keep aircraft flying and not in the ground, particularly when they're only getting paid by the hour until next summer.