On Thursday this week, it was announced announced that Brussels Airlines wants to save more than 160 million euros on an annual basis by 2022. It would mean a cost reduction of about 10%. In fact, last year, the company’s costs reached nearly 1.6 billion euros, according to the annual figures published at the National Bank. The cost reduction objective has been defined in the framework of the “Reboot” future plan.
In recent years, the company has been barely profitable. And 2019 does not look much better, mostly after the bankruptcy of British tour operator Thomas Cook. The Belgian airline carried the bulk of its travelers, and its loss will indeed cost to the company more than 12 million euros.
According to the Reboot plan, Brussels Airlines will have to evolve in the coming years towards a smaller but more profitable company. The goal is to achieve a profit margin of at least 8% by 2022, before again being able to think about growing the business. A margin that is required for the company can assume alone the necessary investments (in the fleet, in the IT department, etc).
Unions claim there is no clarity on job cuts
It is still unclear what impact these economies will have on nearly 4,200 workers. Management is not able to accurately quantify the number of people affected. This will be examined in the coming months or even years, department by department. In any case, it has been made a commitment to compensate as much as possible for job losses through voluntary redundancies, even if dry layoffs are not completely excluded.
The voluntary departure plan is being negotiated with the workers’ representatives. The Christian union, in particular, is reluctant to sign a “blank page”, without further details on the exact impact and fears that the management wants to circumvent the Renault law (in terms of collective redundancies) by distributing dismissals over time . Socialists also ask for clarity on the number of employees concerned. Finally, the liberal training – the main one at Brussels Airlines – is more inclined to continue to negotiate voluntary departures, in order to avoid a collective dismissal.
The unions came out disappointed Thursday morning extraordinary works council at Brussels Airlines. They regret that they still have no clarity on the planned job cuts under the ‘Reboot’ future plan, which aims to increase the profit margin to 8% by 2022, compared to almost 0% currently. “We will not have a clear view for three years, and this will have a clear impact on the atmosphere among the workers,” they summarize.
Despite their insistent demand, the unions have still not been informed of the concrete impact on employment within the company, they lament. “For three years, we will negotiate department by department of voluntary departures to reach this 8% profit margin. So we will not have clarity during all this time,” analyzes Luc Martin, CNE, which is already very uncertain.