MIAMI – Air Europa (UX) parent company Globalia has said it would try to negotiate an alternative furlough deal with its unions if the ERTE scheme is not renewed for a sixth time, the tourism group sources told ch-aviation.

The Spanish government’s ERTE job retention scheme is set to expire in its current form on September 30.

The government has proposed extending ERTE until January 31, 2022, but it has made it conditional on employees receiving training and other conditions, which has sparked outrage among unions.

Around 9,000 employees at Globalia companies such as UX, Be Live Hotels, and ground handler GroundForce will be affected by the temporary layoffs, which are necessitated due to a decline in bookings and demand estimates for the autumn-winter season. UX’s long-haul flight operations have been severely impacted by the COVID-19 outbreak.

Ch-aviation reports that according to data released last week, the five million international air passengers arriving in Spain in August was up 172% from a year ago, which is less than half of its pre-pandemic levels, meaning that Globalia’s operations are significantly lower than they were in 2019.

Air Europa Airbus A330-243 Skyteam livery. Photo: Alberto Cucini/Airways

IAG Aquisition at Risk

Iberia (IB), whose plan to buy UX through parent International Airlines Group (IAG) is still awaiting European Commission clearance, announced last week that if the government scheme was not extended, it would propose a furlough to more than 5,000 employees.

Employees at UX, including pilots, cabin crew, and ground workers, rejected a 6% pay cut until the end of the year in July, which the airline claimed would ensure its existence at the time. Unions questioned the move, citing the airline’s new board members’ exorbitant pay, including CEO Valentín Lago.

As previously reported by the news outlet, the €475m (US$558m) in state loans given to UX have not been sufficient to ensure the airline’s viability. Sources told Spanish newspaper El Confidencial that the carrier would seek up to €150m (US$176m) in further funding.

With the current situation not looking good for Spanish long-haul carriers and the status of the ERTE job retention scheme, IAG might want to ask for another discount to the already sweet deal to acquire UX, a move which would bolster the bidder’s long-haul operations.

The European Commission recently extended its investigation of IAG’s bid to buy UX until December 3.

Featurted image: Air Europa Boeing 737-8 at BFI. Photo: Brandon Farris/Airways