Estonian Air Reaches Labor Deal With Pilots, Strike Annulled

AS Estonian Air and its pilots union reached a collective-bargaining agreement, averting a strike as the national carrier seeks government help to stay in business.

The Tallinn-based company and Estonian Airline Pilots’ Association signed the accord today after it was approved by the company’s board, the two parties said in a joint e-mailed statement. The pilots’ association canceled a strike due to start today after signing the agreement, which expires in February 2014.

Estonian Air, which has lost money since 2006, said in November it would reduce its headcount and destinations by about half after the nine-month loss almost doubled to 20 million euros ($26 million). The pilots announced the job action last month as talks on an agreement remained deadlocked.

“The management can continue their work to restructure Estonian Air,” Chairman Erkki Raasuke said in the statement.

A strike might have led to “massive” losses for the company and a bankruptcy, Postimees newspaper cited Chief Executive Jan Palmer as saying on Jan. 3.

The carrier’s management hasn’t presented a viable business plan to the government yet, Prime Minister Andrus Ansip said on Jan. 3. The government is holding talks with the European Commission on whether state aid can be offered to the company, he said the same day.

To contact the reporter on this story: Ott Ummelas in Tallinn at oummelas@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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