BUSINESS

Korean Air pilots call for 37% raise amid offer from overseas

By 서지연

About 140 pilots lured with higher pay by Chinese, Middle East carriers in 2015

  • Published : Jan 18, 2016 - 16:22
  • Updated : Jan 19, 2016 - 14:07
The nation’s flagship carrier Korean Air faces a bumpy ride as its two pilot unions plan to cast a vote on the pay raise proposed by management -- 1.9 percent increase over 2015.

“The unions have developed action plans, including a partial walkout, in preparation for the rejection of the proposal,’’ Seo Sang-won from the Korean Pilot Union said.

About 1,900 members of the KPU and the New Korean Air Pilot Union will vote on the company proposal until Jan 29.

Industry watchers forecast the airline could face the first strike of pilots in a decade, considering the big gap in pay increase rate between the two parties in talks.

It is nothing new for a company and its union to clash over the annual pay raise in Korea. The labor problem at Korean Air, however, is drawing keen attention from the public as the pilot have demanded a 37 percent raise, the highest level among conglomerates.

“Our demand is legitimate as the company froze or inched up the pay increase rate over  the past few years,” Seo said. According to the unions, the paycheck of pilots was flat in 2013 and rose 3.2 percent in 2014.

About 100 unionized pilots from Korean Air demonstrate in front of the company's main office near Gimpo International Airport, calling for a 37 percent pay hike on Jan. 12. (Yonhap)

The management has expressed its disapproval of the double-digit pay hike, mentioning belt-tightening business conditions, pressed by growing competition from airlines in China and the Middle East, as well as budget carriers. 

Despite the falling oil prices, stock analysts predict Korean Air is expected to post a loss in 2015.

Industry watchers said one reason why the pilot unions have demanded the record-high pay raise is because of growing demand for experienced Korean pilots overseas.

Airlines from major markets such as China and Middle East countries have scouted experienced Korean pilots offering much thicker pay package.

“About 140 pilots left Korean Air last year and 40 pilots among them chose Chinese airlines,’’ Seo said, adding that in general, they were offered twice or three times higher paychecks.

Korean Air pilots are paid 170 million won ($140,334) on average.

“Pilots will continue to be lured by other overseas carriers at a faster pace for the next few years if the company ignores the pay raise demand,’’ Seo claimed.

The labor dispute regarding annual pay negotiations is a corporate matter, separate from the social issue, but some of highly-paid unionized workers at conglomerates, including pilots at Korean Air, Asiana Airlines and production workers at Hyundai Motor, have been ridiculed with the nickname “royal’’ labor class in Korea where pay gap by corporate size is wide.

Many netizens posted negative comments on the bulletin board of Naver portal site regarding the pay raise demand by Korean Air pilots.

In response to the pilot flight, Korean Air is increasing its recruitment, but the company could face safety issues if the drain of skilled workers continues, onlookers said.

By Seo Jee-yeon (jyseo@heraldcorp.com)