AEROLINEAS ARGENTINAS, UNIONS SIGN SALARY AGREEMENT

UNCLAS BUENOS AIRES 001130 SIPDIS SIPDIS WHA/EPSC FOR ROBERT SCHWARTZ EB/TRA FOR JEFF HORWITZ EB/TRA/OTP FOR BIRD MATTINGLEY FAA FOR CECELIA CAPESTANY E.O. 12958: N/A TAGS: EAIR ELAB ECON AR SUBJECT: AEROLINEAS ARGENTINAS, UNIONS SIGN SALARY AGREEMENT REF: BUENOS AIRES 470 ¶1. Senior managers of Spanish-owned Aerolineas Argentinas and leaders of the unions representing the airline's pilots (APLA) and mechanics (APTA) signed an agreement on pay increases on May 15. Representatives of the airline have agreed: to increase pilots' and mechanics' base salary by 19 percent; to maintain the so-called non-remunerative amounts (i.e., compensation not subject to income and social taxes) which the airline began to pay at the conclusion of the December 2005 strike; and to provide a 1 or 2 percent differential for seniority. The 19 percent salary increase will also be extended to the unions representing the airline's co-pilots, navigators, and crews. The agreement also includes a requirement that APLA and APTA pay ARP 10.5 million in fines that the Ministry of Labor imposed for not providing the minimum required service during the November 2005 strike (see reftel). The pilots' and mechanics' unions also agreed to maintain "social peace" (i.e., no further work stoppages) until March 2007. ¶2. Members of APLA and APTA had demanded 45 and 75 percent salary increases, respectively, throughout the negotiating period. Aerolineas Argentinas Director for Corporate Planning Daniel Burlas told Econoff that the airline's negotiating team walked away from the salary discussions two weeks earlier when "it became evident the unions had no genuine interest in reaching a mutually acceptable conclusion." Press reports on May 16 indicate that President Krchner had ordered Labor Ministry officials mediating the negotiations "to protect the airline's employees." Kirchner also ordered that the final settlement "allow the airline to fulfill its service obligations to avoid damages to the thousands of people who use the service to travel within and outside the country." -------------- Comment -------------- ¶3. President Kirchner may have authorized Labor to implement the fines totaling ARP 10.5 million on APLA and APTA as a disciplinary measure to discourage these unions from initiating work stoppages that might strand thousands of passengers as they did in December 2005. The agreement formalizes the fines which had been discussed but not imposed during salary negotiations reported in reftel. End Comment. ¶4. To see more Buenos Aires reporting, visit our classified website at: http://www.state.sgov.gov/p/wha/buenosaires.< /a> GUTIERREZ