Questions raised about redundant workers' fund for Air France

The proposed sum of 26 million euros to help redundant workers from Air France raises questions about European Globalisation Adjustment Fund

By Dods EU monitoring

21 Nov 2014

On November 20th 2014, the BUDG Committee discussed its report on the mobilisation of the European Globalisation Adjustment Fund (EGF) for Air France. As this is a large sum, some issues were raised about the role and intent of the EGF in this discussion, including the role of companies to make good management decisions in the face of competition, especially in the European aviation sector.

Please note that this does not constitute a formal record of the proceedings of the meeting. It is dependent on interpretation and acts as an unofficial summary of the debate.

Marco Zanni (EFDD, IT) said that the proposal was adopted on 11 November to mobilise the EGF for workers made redundant from Air France KLM. He stressed that the amount requested is quite high: 26 million euros (50% of the cost of reintegration for the 3,886 workers affected). He added that the reference period is July 2013 to 31 October.

The French government already started the programme by providing support for the workers, and like Fiat Poland, this is a case of reimbursement for the funds provided by the French government.  

He explained that the air transport situation in Europe is very serious and the most significant impact of losses is two-fold: a loss of market share by European operators because of the growth of Persian Gulf companies in this sector, and high fuel costs.  

Jean-Paul Denanot (S&D, FR) broadly agreed with the rapporteur and said that goods and services are affected and this is an example of globalisation. He also referred to companies from the Gulf buying large aircraft and European air companies suffering from this competition. He believed they should meet the French government’s request.

Liadh Ni Riada (GUE/NGL, IE) asked both the rapporteur and Commission whether trade unions and organisations were engaged with or consulted on this application for the EGF. She believed that trade unions and workers need direct involvement in these situations.   

Monika Vana (Greens/EFA, AT) noted that this case is more controversial than others and it also shows the importance of the change in the rules. This case came when they did not have the 35% limit to allowances and so this case is disproportionate between the measures which should be fostered by the EGF. Here there is a large sum of direct allowance (70%) and under the new rule, such a case will not be admissible.

Richard Ashworth (ECR, UK) noted the reasons of aggressive competition and increased fuel costs and he wondered why this is exclusive to Air France? Has this not affected other airlines such as Lufthansa? He then said this could be seen as a market distorting subsidy, which is not the original intention of the EGF. He argued for revisiting the original terms of the EGF and avoiding market distorting subsidies.

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