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According to the newspaper, LATAM can use a subsidiary to reinstate crew members with lower salaries

Photo Latam – Disclosure

According to the O Globo newspaper, LATAM Brasil is considering firing and hiring crew members through a subsidiary, but at lower wages. The information was published by Mariana Barbosa in the newspaper’s Capital column, citing a negotiation meeting between the airline and the National Union of Aeronauts – SNA.

According to the newspaper, which had access to the video of the business plan presentation for SNA, the crew (pilots and flight attendants) would be reinstated by another company.

The O Globo newspaper even cites the use of ABSA as an aid to business. While not impossible, it would be complex as we shall see.

Brazilian Airlines?

The Latam Group now has an airline specializing in air freight called ABSA, or simply Aerolinhas Brasileiras SA. This is the official name of LATAM Cargo Brasil.

The company started in 1995 with chartered cargo flights with the classic Douglas DC-8F freighter. Soon after, the company became ABSA and the Chilean LAN acquired a stake in the company. With the founding of the LATAM Group in 2012, the cargo was renamed TAM Cargo and later LATAM Cargo when the brand of the Latin American company was announced in 2015. Today the company has three Boeing 767-300ERFs.

The company has its own Air Operator Certificate (COA) with the codes IATA M3 and ICAO LTG. The callsign is TAM CARGO instead of the traditional TAM code used by LATAM Brasil passenger planes.

THE DEPARTURE: Just as the entire ABSA operation is independent, its pilots do not command passenger planes for the rest of the group, in addition to employment contracts in a particular CNPJ. According to the article in the newspaper O Globo, this last point would be the outcome for LATAM: that is, to reinstate the dismissed crew members, but to use ABSA data, which in turn would provide services to LATAM.

ABSA’s Boeing 767

IN THE THEORY IT WORKS, BUT …: A permanent wage cut is now possible at LATAM and in no Brazilian company due to labor law restrictions. In theory, however, it is at the discretion of the company and the crew member to create an equivalent position with ABSA that has a different CNPJ.

However, this could pose an occupational risk for ABSA as the crew members for the parent company (of the same economic group) would act in roles comparable to those of their pilots. A request for wage parity could occur over time and even lead to massive labor claims.

DRIBLE: In order to reduce the legal risk, LATAM would articulate to transfer the operation of Airbus jets to ABSA, which today only flies the Boeing 767. With this, ABSA could, for example, open positions for “Airbus Pilot A32F” and avoid the wage parity factor mentioned above.

PLAN B: According to O Globo, this would be LATAM’s Plan B if the negotiations with the National Union of Aeronauts (SNA) on permanently reducing wages by lowering daily rates and / or lowering the payment per kilometer flown would be fruitful.

OUTSIDE: The practice is widespread in the US and Europe, especially with regional airlines. To avoid a wage cut across the company, unions in these countries limit the size of planes, fleets and routes that outsourced subsidiaries can fly. In addition, several airlines around the world have subsidiaries that are only responsible for the management of pilots and flight attendants, while other laws even allow outsourcing, which is much less common.

LATAM Airbus A320

On the other hand, the SNA would have viewed this proposal as a threat to jobs and a weakening of the category that could be exempted from labor reform that allows core activities to be outsourced. In the case of LATAM, however, the measure would not be illegal as ABSA is also an airline.

We have contacted LATAM and the SNA for further clarification. O Globo tried the same approach but the airline declined to comment.

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