Burden on Management
Wage negotiations between Korean Air and its pilot union are expected to mark time for three consecutive years. This situation is expected to give rise to more burdens on Korean Air's management.
According to the airline industry on November 5, the Korean Air Pilot Labor Union will vote for the election of a new union executive for ten days from November 7 to 17. Former chairmen pilot Lee Kyu-nam and pilot Kim Sung-ki ran for the post.
Industry experts say that although there is a difference in the dispositions of the two candidates, it is expected that future wage negotiations will face difficulties even if they are elected. If former chairman Lee who is radical is re-elected, it will mean that the current labor union’s basic lines and struggle policies will be re-trusted by union members. There is a strong possibility that chairman Lee will take a harder stance toward the management as his term will extend. If Kim, the other candidate, becomes a new chairman, it will take a considerable amount of time to form a new labor union leadership and take over work from the previous chairman. Kim will also need time for discussions with the management and new policy directions. It will be never easy to conclude the wage negotiations within this year as less than a month will be left after the election.
Korean Air held wage negotiation meetings with the pilot union 37 times in 2015 but failed to iron out differences. If they fail this year, the wage negotiation for 2015 will last more than three years. The pilot union trimmed its pay raise rate from 37% to 29% and then to 4% in 2015. It also calls for a pay increase of 7% in 2016 and performance-based bonuses. On the other hand, the management suggested a pay increase of 1.9% in 2015, 3.2% in 2016 and the establishment of a security allowance increase and a “wait at airport” allowance by taking into consideration of equity with the general staff.
This year, Korean Air is expected to record net profit in five years. Its operating profit is expected to exceed 1 trillion won (US$900 million) for the second consecutive year. As the results are good, the labor union may raise its voices. "If the union goes on a strike in the 4th quarter of this year and the first quarter of next year, the peak winter season, it will drive a burden on the management, too," an industry official said.