Budget airline EasyJet has asked pilots and cabin crew to agree to sweeping changes in their terms and conditions, as part of its response to coronavirus.
Among the proposed changes are a freeze on planned pay rises and a requirement to take three months of unpaid leave.
The airline would also no longer provide food for crew during their shifts, only water.
People close to the talks said the proposals went down very badly, particularly among pilots.
However, there remains a willingness to make concessions in order to avoid redundancies.
Further talks between EasyJet and unions representing pilots and cabin crew are expected today.
Meanwhile, EasyJet’s chief executive Johan Lundgren has defended the payment of £170m in dividends to shareholders, at a time when the company is seeking financial help from the government.
An angry response
On Wednesday, EasyJet’s recently-appointed chief operating officer Peter Bellew met delegates from the pilots’ union Balpa and Unite, which represents cabin crew.
Under discussion was a proposed “coronavirus cooperation agreement” setting out changes to employees’ terms and conditions. It would be in force from 23 March 2020 until 15 November 2021.
Both sides acknowledge that action is needed. Travel restrictions across Europe have forced it to cancel many of its flights and ground nearly a third of its fleet. The airline needs to save cash, and the unions want to preserve jobs.
However, sources say the proposals themselves provoked an angry response.
The four-page document would allow the airline to cancel pay rises until 2021, make significant changes to working patterns, and allow it to defer pay rises for newly-promoted captains for six months.
Pilots in particular seem aggrieved by the plan. According to messages seen by the BBC, negotiators agreed to reject it on the principle that there was “no evidence that the current crisis warrants such an extensive change in terms and conditions for such a long period, particularly when so many of them are so critically linked to flight safety and fatigue”.
Balpa has refused to comment, as the talks are ongoing.
Unite, meanwhile, has taken a softer tone. The union denied reports it had told the airline that compulsory redundancies were preferable to the deal on the table.
“Unite is very much still in talks with EasyJet and it is totally untrue to suggest the union has rejected all the company’s proposals”, it said in a statement.
However, insiders told the union shared concerns that the airline might be using the current crisis as an excuse to change working practices, and erode employees’ pay and benefits in the long term.
In a statement, the company said: “Easyjet has met with its employee representatives in the UK to discuss how they can help the airline navigate through these unprecedented times…
“Like all airlines we are taking every action to remove cost and non-critical expenditure from the business at every level to help mitigate the impact from the Covid-9 pandemic.”
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Meanwhile, EasyJet’s chief executive has told the BBC the company is asking for government loans to help it weather the crisis.
He said the company was “first and foremost” trying to save cash. But he added: “Since we don’t know how long this thing will last we also think it’s appropriate that we’re also looking for financing being supported as well from the government.”
Such support, he said, would take the form of “loans on a commercial basis”.
He defended a £170m dividend to shareholders, due to be made tomorrow, saying it had already been signed off – and the company was legally obliged to make the payment.
Easyjet says Mr Lundgren, Mr Bellew and Chief Financial Officer Andrew Findlay have all elected to take a 20% cut in their monthly salary from April to June.