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At the end of September, 729 TAP workers left for non-renewal of fixed-term contracts, a TAP source told Jornal Economico (JE), noting that “there were no layoffs.” TAP’s combined strategy of reducing work hours and human resources has reduced personnel costs by almost 50%, says the same source, admitting that “we will have to cut more.”
“TAP’s approach is to reduce fixed operating costs. Note that in the third quarter we flew 80% less than in the same period last year and, naturally, all associated costs fall, from fuel expenses to airport taxes, which means that the best way to reduce these expenses it’s the operation itself, ”a TAP source told JE. In that sense, he says, “there are fixed costs such as personnel expenses and aircraft rental expenses.”
“Our challenge was to ‘vary’ the fixed costs, make the fixed costs variable, and I think we did it well,” says the same source, referring that “our personnel costs fell almost 50%, being almost half, in the same way that this also happened with the expenses related to the rental of aircraft ”.
“This was done by not renewing the contracts. There were no layoffs. Only the term contracts expired in this period were not renewed. There was no point in renewing due to the low demand for flights. Unfortunately, this included workers not only related to the flights, but also workers at the TAP headquarters, ”says the source.
“In total, they covered 729 workers until the end of September, which allowed the company to save significantly. The other saving was due to the simplified severance scheme in force until July, but as of August it was changed to the Extraordinary Scheme to Support the Progressive Resumption of the operation, regulated in the terms of the Economic and Social Stabilization Program, through which established a mechanism to reduce working hours between 70% and 5%. Naturally, TAP adopted this regime, allowing significant savings. In this regime, workers went to work between 95% of the day, up to 30%, depending on the functions and positions, divided into groups. This reduction in working time allowed a saving of almost 50% in labor costs for the company compared to the same period last year ”, says the TAP source.
“This support was a very important contribution, but the transitory nature of this framework makes it imperative to adopt permanent solutions, which will be achieved through negotiations with the unions representing TAP workers,” says the company, detailing that “in the third quarter of 2020 , personnel costs were reduced by 49% compared to the same period in 2019 ”.
This strategy will continue to be maintained in the fourth quarter, but the company still does not know how to quantify the reduction in human resources that will be implemented until the end of the year. “The idea is to continue without renewing fixed-term contracts until the end of the year, depending on how the crisis evolves. We have to evaluate how the non-renewal will be carried out until next year. Because we are going to need to reduce it even more. However, we have not yet managed to advance with the amount of reductions that will take place until the end of the year ”, says the same source.
Unions fear 4,600 exits
In this context, job frustration at TAP will tend to increase, considering the warnings made in the meantime by the union structures representing the more than 10,000 workers of the TAP Group. There are explicit indications of possible cuts in the universe of TAP ground personnel, which will eventually imply a possible reduction of 450 workers from M&E Maintenance and Engineering, in addition to 300 workers from the headquarters facilities, in a total of 750 workers from land. However, the elimination of jobs can reach a global universe of 3,000 workers, involving voluntary measures, which include layoffs by mutual agreement and other solutions that will be analyzed.
This fear is shared by the unions of Economists (SE), Engineers (SERS), Accountants (SICONT), Metalworking and Related Industries (SIMA), the National Union of Civil Aviation Workers (SINTAC), the Commercial Aviation Union (SQAC ) and the Union of Airport Handling Technicians (STHA). In addition to the reduction in the number of workers, there are also indications that a 25% cut in the wage bill for ground personnel will be proposed, although “above a minimum guaranteed value”, which will mean that wages will not be cut Lower.
At this time, 1,600 fixed-term workers are at risk who, since April 2020, have not renewed their contract, or who will not renew their contract until March 2021 and who, added to the universe of potential 3,000 workforce reductions, will add up to around of 4,600 potential departures, in a company that will have full schedules as of December 1, in order to create the technical conditions so that it is possible to start the great departure phase in the 60 days following the support previously granted to TAP to maintain its universe of workers.
In SPAC – Union of Civil Aviation Pilots, it is admitted that the restructuring of TAP provides for the dismissal of 500 pilots and a salary reduction of 25% of their salaries. The SNPVAC – National Union of Flight and Civil Aviation Personnel considers that TAP will need a new capital contribution in the order of 4,000 million euros.
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