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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Airline strikes: 2016 a peak year for Europe's legacy airlines. Wakeup time, as LCCs pick them off
Pilot strikes at Lufthansa. Again. A strike ballot among British Airways cabin crew. A guilty verdict for Air France workers who assaulted an executive during a union protest. These were all headlines in late Nov-2016, following Air France pilot and cabin crew strikes in summer 2016. Labour relations at Europe's three biggest legacy airline groups are an ongoing challenge.
A CAPA report in Jun-2016 highlighted the growing number of articles on CAPA's website mentioning the word 'strike'. It raised the possibility that if the rate continued through the year, 2016 could be the biggest year for strike-related articles since before the global financial crisis. With a little under a month still to go, this year has already comfortably passed this milestone.
To a large extent labour unrest grows as airline industry profits increase. However, rather than hoping for an industry downturn to reverse the rise in the cycle of strikes, airline CEOs are talking tough – a line long taken by IAG's Willie Walsh. Lufthansa's Carsten Spohr has said that taking on the pilots is "about the future of Lufthansa", noting that it has “no chance of survival" if it gives in to pay demands (Bloomberg, 24-Nov-2016).