News
Korean Air pilots demand 37% pay rise in 2016
January 22nd 2016
Labour union rows over pay are not unusual. But in current negotiations between two pilot unions and Korean Air, the gap in expectations is unusually large. The South Korean flag carrier proposed a 1.9% increase over 2015 levels while the pilots have demanded a 37% pay rise, reported the Korea Herald. Read More »
Management argued the steep increase is unreasonable and comes at a bad time for the airline, which is facing fierce competition from Mainland and Middle East carriers on its flights to the U.S. and Europe, respectively. At the same time there is a general belt-tightening developing in business conditions in the region, especially China. Korean Air is sticking to its 1.9% offer.
Approximately 1,900 union members will vote on the proposal by next Friday, but their consent seems unlikely. According to union representative, Seo Sang-won, “the unions have developed action plans, including a partial walkout, in preparation for the rejection of the proposal”.
If Korean Air rejects the 37% increase, a pilot exodus can be expected. For years, Chinese carriers have been luring experienced pilots from overseas to their airlines, with a significant number recruited from neighbouring South Korea. The Wall Street Journal has reported that U.S. pilots are receiving offers of roughly double their salaries to join Mainland airlines. Foreign pilots at Chinese airlines often are paid significantly more than their Chinese counterparts, a practice that has caused tension at Air China.
Last year Korean Air lost 46 pilots to Chinese carriers, up from two in 2014 and seven in 2013, said the Korea Times. Asiana Airlines, the country’s second largest carrier, lost 61 pilots to Chinese airlines and other foreign carriers, up from 31 in 2014 and 28 in 2013.
Korean Air pilots are paid 170 million won ($140,300) on average a year. In China, they can easily earn $300,000 a year as well as better perks than they receive at their home carriers. Despite the oil price drop, analysts predict Korean Air will post a loss for the fiscal 2015 year.
