Pilot strike leads to flight cancellations

Published: 5/11/2000

Balkan Airlines has been grounded by a strike since 2nd May, as pilots struck demanding salary increases and improvements in safety standards. The dispute has now brought the intervention of the Bulgarian Prime Minister; Ivan Kostov, who has threatened to withdraw the carrier's licence if they do not come to agreement with striking pilots, but added the government would do all that was possible to bring the two sides together. In the meantime a large proportion of the airline's 70 flights a week have been cancelled and Sofia airport is reported to be chaotic According to the pilots they are only seeking parity with the other major Bulgarian airline, state owned Hemus, who according to reports, receive between $1,2000 and $2,400 a month compared with the Balkan pilot's $750. Russian daily Vedmosti has reported sources as saying that the pilots are seeking $3,000 a month. The airline, sold to the Israeli Zeevi Group in 1999, responded that wage rises for the airline's 260 pilots could not be made until the airline was restructured, which will involve the dismissal of 600 staff by the end of June. Balkan's CEO, Andrew Gray has said that the strike was illegal and there would be no discussions with the pilots until they returned to work. There are however, conflicting reports saying that the head of the Zeevi Group, Gad Zeevi, has visited Sofia and offered the pilots 10% of the airline's projected $10m profit, an offer that was reportedly rejected by the strikers. According to the airline they are now losing $1m a day and that the situation will deteriorate further as they lose valuable summer charter traffic Since acquiring the airline in June of 1999 the Israeli's have found the restructuring a challenging task and have continued to lose money on their $150,000 investment, in which they have undertaken to invest a further $100m during the next three years. Reports have also emerged that the group is not entirely happy with the deal and they have sought more favourable conditions from the Bulgarian government, arguing that the company was in worse condition than expected at the time of the sale last year. Relationships with the unions have also not been good, with the unions claiming that Zeevi's lack of investment commitment is destabilizing the airline and threatening safety standards.

Article ID: 1766