Business

Latam Brasil to lay off 2,700 crew members

Under a collective bargaining deal, Latam must first offer a voluntary dismissal program to its staff

LATAM Airbus A320 airplane
Photo: Markus Mainka/Shutterstock
  • Last month, Latam Brasil filed for bankruptcy protection in New York;
  • There are also rumors that Azul may buy the Latam BR division, and Azul’s CEO said the was “not impossible”.

Latam Brasil airline will lay off 2,700 crew members after a refusal to negotiate permanent pay cuts, reports Valor Econômico. Under the collective bargaining deal, Latam must first offer a voluntary dismissal program. The program application deadline started on Friday and runs through August 4, Tuesday. After this phase, the company plans to lay off at least 2,700 crew members.

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Latam Brasil is amidst a process of judicial recovery of its finances. Last month, it sought bankruptcy protection in New York. With mounting financial problems, there are also rumors that Azul may buy the Latam Brazilian division or merge with it – Azul’s CEO said the deal was “not impossible”.

Currently, Latam Brasil employs 2,000 pilots and 5,000 flight attendants. Valor Econômico reports that the company said that adjustments in the calculation of remuneration are necessary to balance its costs with those of competitors, anticipating a longer period of dispute in the market.

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Unlike Gol and Azul, which negotiated agreements to reduce wages and work hours for 18 months, Latam proposes that at the end of this period permanent changes in the calculation of remuneration should be implemented to reduce wages. Crew members accept temporary workload and salary cuts, but not permanent ones.