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Published: Sunday November 15, 2009 MYT 7:24:00 AM
Updated: Sunday November 15, 2009 MYT 7:28:46 AM

Finnair pilots to strike after rejecting mediation


HELSINKI (AP): Some 800 Finnair pilots will begin a strike on Monday, grounding all scheduled international and domestic flights of the Finnish national carrier, the airline said.

The announcement came after pilots rejected a labor contract proposal by the state mediator following months of unsuccessful talks between the airline and pilots on working conditions and pay.

The strike is expected to affect about 20,000 people on its first day and will ground all regular flights.

Finnair, which operates some 200 flights daily, said it is "likely to cancel nearly all long-haul flights" departing Helsinki on Sunday and European flights departing Sunday and returning on Monday.

"Finnair aims to operate all of its leisure flights regardless of the strike," the airline said, adding that its code-share partners will fly to and from Helsinki as normal despite the strike.

The Finnish Airline Pilots' Association said that union leaders had unanimously rejected the proposal.

"This mediation proposal did not bring any answers to the main point of disagreement about the use of non-company employees," association chairman Kristian Rintala said. "We maintain that Finnair planes should have Finnair pilots."

Finnair spokesman Taneli Hassinen denied the airline wanted to use non-Finnair pilots.

"In certain market conditions we need to be able to use non-company employees ... but in no way are we planning to allow outside employees into Finnair cockpits," Hassinen said.

National Conciliator Esa Lonka said no timetable to reopen talks between the union and airline had been agreed.

Finnair has been struggling in the recession with declining demand, competition from budget airlines and overcapacity.

On Monday, it warned of more cutbacks this winter after slashing capacity by 12 percent in October. Last month, it reported that third-quarter net loss deepened 15 percent to euro21 million ($31 million) and cautioned it would take a long time before the company would be competitive. Sales fell 22 percent in the period.

The airline has said it will begin statutory talks with all its 9,000 personnel to initiate more cost-cutting measures, after doubling an annual savings program to euro200 million - with most of the new cuts aimed at personnel costs.

"The strike that will now begin on Monday will cancel out all those savings achieved with great hardship by other employee groups," said Anssi Komulainen, head of personnel at the airline. "Now we are forced to come up with totally new solutions in order to secure the future of the company."

In August, CEO Jukka Hienonen announced his resignation in what he called "crisis conditions" because he was not satisfied with the pace of change in the airline in the challenging times and partly blamed unions for inflexibility.

He will be replaced by Mika Vehvilainen, the chief operating officer of Nokia Siemens Networks, on Feb. 1.

In 2008, Finnair personnel rejected proposals for pay cuts to help the airline and axed 500 jobs. This year, the airline has cut 200 jobs and began temporary layoffs for 6,000 workers in April spread out through 2009.

Finnair, which is 56 percent government-owned, flies to 50 destinations with a fleet of 63 aircraft. Last year, 8.3 million passengers flew the airline, down 4 percent from 2007.

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