Crisis of Airlines

Asiana Airlines labor union (union leader Lee Jae-Won) decided to go on strike on June 12 if the negotiation with the management fails. Korea Air pilot’s union would strike on the same day depending on the outcome of vote.

If two major airlines go on strike, not only passengers will have to experience inconvenience, but also the national economy will suffer.

- Asiana Arilines:

Asiana Airlines` labor union (except the pilots) announced yesterday that a total of 2037 union members out of 2456 members participated in a poll and 1664 (81.7 percent) voted for the strike. The labor union said that ``we have been negotiating with the company throughout the seven round of talks, demanding a raise in their basic wages (167500 won), guaranteeing holidays, increase in allowances, and four other demands. However, the company has not responded appropriately to our demands.``

The company said, ``the amount of deficit reached 156 billion won last year. The amount of deficit until March reached 120 billion won this year. In a situation like this, it is difficult to accept the demands for the excessive raise in wages. We will continue to hold on to a 4.5 percent basic wage raise.``

Meanwhile, Ministry of Labor anticipates that there is the last chance for the negotiation since the labor union and company have decided to continue its negotiation after postponing arbitration meeting to 11th.

- Korean Air (KAL): KAL pilot’s labor union has been demanding the raises in 15 different kinds of allowances, including night flight allowance and the union leaders’ flight allowance (guarantee the 120 hour flight per month) in order to secure the safe flights. The company said that ``the amount of deficit was 350 billion won last year. We already raised the flight allowance (12,000 won per hour) in April. If we accept the labor union’s demand, the wages of pilots will increase by 56.5 percent.``

Since the KAL’s labor union and the management have entrusted their rights of negotiation to the Korean Confederation of Trade Union (KCTU) and to Korea Employers Federation (KEF) respectively, their dispute looks as a `proxy war` between the labor circle and the business circle. The KCTU regards the KAL as the `vanguard of the June struggle` since other labor unions are quiet unlike last year.

Meanwhile, an official of the Ministry of Labor said that ``if the central labor committee orders to continue the negotiation, labor union’s strike which is scheduled on 12th becomes illegal activity. The burden of the arrest of the leader of the strike and the public opinion which refers the strike as the `unreasonable demands by the high income earners` will become the variables.``

- Expected loss and the problem of passengers who already made reservations:

If the strike goes on, the amount of loss on sales for Asiana Airlines is estimated to be 5 billion won, and 20 billion won for the KAL. However, officials anticipate that the declination of the international trust due to the heap of the flight cancellation followed by the national loss and the inconvenience of passengers cannot be calculated by money. It is good for the passengers not to use the two airlines on 12th and 13th. Even if the strike stops within a day, the flight can be cancelled due to the rest-regulation of pilot (rest for 12 hours before the flight). Passengers who already made reservation on the flights on 12th and 13th should check often for the cancellation of the flight.

KAL: 02-1588-2001, Asiana Airlines: 02-669-8000

- Hospitals are in trouble as well: 20 hospital labor unions including the Seoul National University Hospital are voting to decide whether to strike. The labor union argued that ``since the situation of the management has improved due to the increase in the medical expenses, the wage should increase by 12.7 percent. However, the management rejected their demands. The Ministry of Labor does not deny the possibility of strikes by the hospital labor unions.

Social Insurance Labor Union (previously Regional Medical Insurance Labor Union), which has fought against the diminution of the employees, plans to strike along with the schedule of the KCTU on 12th. It is anticipated that 114 telephone information and the other tele-communication maintenance service will undergo some difficulties since the Korea Telecom contract workers’ union plans to strike demanding the withdrawal of the ejection of the 114 Information center.

jinhup@donga.com