Czech Airlines has managed to reduce those personnel costs that it can directly influence bringing a reduction in the number of employees and refining its organisational structure in 2007. The cuts will bring savings of one hundred million crowns but costs will rise because of the collective agreements that have already been signed and the new Labour Code amendment.
Throughout 2006, ?SA has been well below its plan of 5,600 employees because the management has abolished nearly a hundred unfilled positions. In August, some employees took advantage of ?SA’s offer under the OK Agreement programme, by which 142 employees could leave by agreement. At the end of 2006, ?SA will employ nearly 5,300 people; by the end of Q1 2007, it will shed approximately another 200 employees. Therefore the number of employees should stabilise around 5,080, with approximately 100 employees per aircraft, which is comparable to similar airlines.
Cutting operating costs and refining the organisational structure by reducing the number of employees does not, in any way, negatively affect the safety and efficiency of ?SA’s operation. Only redundant positions are being eliminated, especially in administration, i.e., outside the operating units. Reducing the number of employees is one of the many steps which ?SA’s management is taking to implement the three-year restructuring plan and transform ?SA into a competitive company with good long-term prospects.
The restructuring has also reduced the number of management positions while cutting operating costs and refining the organisational structure. The goal is approximately 120 less higher and lower managers per 5,080 employees. This will involve savings of many millions of crowns for ?SA, not only in wages, but also other, related costs (company cars, office space, etc.).
?SA will achieve its employee reduction goals by the end of Q1 2007 and so the management will comply with the plan to slim down ?SA by approximately 10 to 20 per cent. Including 2006 and the end of the 1st quarter of 2007, this will mean a reduction of approximately 500 positions, i.e. 10 per cent. ?SA will lose another 10 per cent of its employees if the Divestment project is implemented. These people, however, will not lose their jobs. A condition of the sale is that the obligations of Cargo terminal and Catering are taken over by the purchaser, which includes employment relation obligations. Divestment is not a way to reduce the number of employees; it is a way for ?SA to secure ready funds during the transient period of restructuring without the company being forced to resort to severe cuts in its main line of business.