Continental Airlines’ new CEO, Jeff Smizek announced (04-Jan-2010) he is foregoing his USD730,000 annual salary and bonus until the company makes a full-year profit. In his first action since his appointment, Mr Smizek, in a letter to employees, said the company’s greatest challenge was “making money on an on-going basis.” Noting the USD1 billion in losses since 9/11, he said the company must change from managing from crisis to crisis to one it which it controls its own destiny. He added, “what I am asking is that you join me in making Continental profitable again. I’m asking that you do what you do best – provide our customers outstanding service while working more efficiently, bringing in new revenue and out-performing the competition”. The letter is more urgent considering the company faces expiring labour contracts this year.
New Continental CEO Smisek foregoes salary
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Europe's aviation strike spike could signal a cyclical peak - with downturn to follow
One swallow does not make a spring and nor does a rash of aviation strike news guarantee a turning point for the aviation industry. But the signs are ominous. In the month of Jun-2016 (to 20-Jun-2016), there have been 136 articles on CAPA's website mentioning the word 'strike'. This compares with 81 for the first 20 days of Jun-2015. For 2016 so far (1-Jan-2016 to 20-Jun-2016), the 's' word has occurred in 594 articles – about 20% more than in the same period in each of the past two years. If this rate continues, 2016 could be the biggest year for strike-related articles since before the global financial crisis.
The vast majority of the Jun-2016 articles – 80% – relate to Europe. A significant source is air traffic control disputes, particularly French ATC. There have also been strikes and/or strike threats involving airport workers and ground handlers. Among European airlines, Air France has generated the most coverage for its ongoing dispute with its pilots, and it may also face a cabin crew strike. Lufthansa has not yet faced a strike by its employees this year, but has not yet reached new agreements with pilots or cabin crew after industrial action last year.
History tells us that labour's demands grow as profits rise. The apparent increase in industrial action this year could be a signal of an approaching peak in the airline profit cycle. There are other causes of unrest, such as impending French labour legislation, but the correlation reflects some history.