Labor Dispute Could Ground Arkia Flights Next Week

Executives and union representatives set to meet on Sunday for another round of negotiations.

In a final attempt to keep Arkia Israel Airlines' planes in the air next week company executives and union representatives are set to meet Sunday for another round of negotiations.

Some progress was made on the union's complaints in talks this week among CEO Gadi Tepper, chairman of the Transportation Workers' Union at the Histadrut labor federation Avi Edri, and Arkia union committee chairman Yigal Cohen, but there are still several outstanding issues.

An Arkia flight.

On Monday the two-week cooling-off period following the union's declaration of a labor dispute will end, and sanctions could begin.

Workers and management have not reached agreement on the terms for heightened cooperation between Arkia and El Al Israel Airlines, up to and possibly including a merger. Nor have they agreed on the issue of hiring nonemployee pilots. According to Arkia's employees, who hold 30% of the airline's shares, controlling shareholders the Nakash brothers are not cooperating with them over possible cooperation with El Al.

Arkia wants to use pilots from Israir Airlines for some of its flights. It has rejected proposals put forth by union reps for Arkia, including setting limits on outsourcing pilots.

The company and its workers have come to see eye to eye, however, on in-flight sales of duty-free products, which have returned after being suspended by Arkia. The issue was one of the main reasons for the labor dispute, with flight attendants claiming that stopping the sales cut their wages by around 30%.

Cohen told TheMarker yesterday that he "hoped the talks would end in agreement and we won't need to take action."