Aeroflot ditches 2,000 employees

With passenger numbers down more than 10% since last year, Aeroflot is laying off more than 2,000 out of its 15,000 staff, and there could be more to follow.

The trade unions claim they still haven’t received any notification, so workers have been left with the uncertainty of who will be getting the boot next.

Mikhail Deryugin has over 22,000 flight hours after 38 years of flying with Aeroflot. He heads the flight attendants trade union. A few days ago he asked for a vacation, only to discover he is due for the chop in two months’ time.

“It’s impossible. The president of the trade union can only be dismissed by a board decision, and I’ve never had a bad mark against me. The company is trying to decapitate our trade union, like it did with the others. This is against the law and I may have to take it to court,” Deryugin told RT.

Mikhail, however, is 61 – a year over the official retirement age in Russia. His dismissal comes as Aeroflot cuts staff.

“Naturally, cutting costs is our main concern. We are trying to optimize our expenses and we are trying to introduce new modern technologies. We are working on the 2010 budget. The average trend in Russia is negative on the whole and the number of passengers continues falling,” said Vitaly Savelyev, Aeroflot’s general director.

However, the Russian carrier has been pumping cash into its foreign offices. As a result, the Delhi office has more than 50 workers. Analysts agree Aeroflot is massively overstaffed.

“I think it should be between 9,000 and 10,000 people – which means that 5,000 to 6,000 should be dismissed. This is based on international experience. If you look at international companies, you’ll see that they have roughly 1,000 personnel per one million passengers transported,” believes transport analyst from VTB Capital Elena Sakhnova.

The company is 51% owned by the government. The largest minority shareholder, billionaire Aleksandr Lebedev, has been frustrated with the company’s management lately, saying his three-month-old son could easily do his job as he has no control.

In his blog Lebedev suggests Aeroflot has other options to cut costs – getting rid of its sponsorship of CSKA football club or its vast real estate in Moscow.

Aeroflot moved its top management to a premium-class business center in Moscow this summer – after voicing intentions to cut staff. Rent will cost five million dollars a year. This comes after Aeroflot’s completion of its 100 million-dollar headquarters near Moscow’s Sheremetyevo airport, so it doesn’t appear that Aeroflot is short of money.

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