LATAM can use subsidiary to re-hire crew members with lower salaries, says newspaper


Photo Latam – Disclosure

LATAM Brasil is considering firing crew members and rehiring them through a subsidiary, but with lower wages, according to the newspaper O Globo. The information was disclosed 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, who would have had access to the video of the presentation of the company’s plan for the SNA, the crew (pilots and flight attendants) would be rehired through another company. The O Globo newspaper even cites the use of ABSA as a support to the business. Although not impossible, it would be complex, as we will see.

Brazilian Airlines?

The Latam Group has an airline company today specialized in air cargo, called ABSA, or simply Aerolinhas Brasileiras SA This is the official name of LATAM Cargo Brasil.

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

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

THE EXIT: In the same way that the entire ABSA operation is independent, its pilots do not command passenger aircraft for the rest of the group, in addition to having work contracts in a specific CNPJ. According to the article in the newspaper O Globo, it would be exactly in this last point that the exit for LATAM would be: that is, rehiring the dismissed crew members, but using ABSA data that, in turn, would provide services to LATAM.

Boeing 767-300F ABSA Cargo plane
Boeing 767 da ABSA

IN THEORY IT WORKS, BUT …: Permanent wage reduction is not possible today at LATAM, as well as in any Brazilian company, due to restrictions of labor legislation. But, in theory, the moment a related position is created at ABSA, which has a different CNPJ, the salary is at the discretion of the company and the crew member to accept it.

Even so, this could create a labor risk for ABSA, since the crew members would be acting for the parent company (of the same economic group) in functions comparable to those of its pilots. A request for wage parity could occur over time, even resulting in massive labor claims.

DRIBBLE: To mitigate the legal risk, LATAM would be articulating to transfer the operation of Airbus jets at ABSA, which today only flies the Boeing 767. With that, ABSA could open vacancies for “Airbus Pilot A32F”, for example and avoid the factor of wage parity mentioned above. Even so, the companies would still be part of the same economic group, since the parent company of ABSA would remain Latam and the labor risk still exists virtually.

PLANO B: According to O Globo, this would be LATAM’s plan B, if the negotiations with the National Union of Aeronauts (SNA), for the permanent reduction of wages through the cut of daily rates and / or the reduction of the payment per kilometer flown, are not fruitful.

OUT THERE: The practice is very widespread in the USA and Europe, mainly on 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 maintain subsidiaries responsible only for the management of pilots and flight attendants, while other legislation even allows outsourcing, which is much more rare to see.

Airbus A320 LATAM plane
Airbus A320 from LATAM

On the other hand, the SNA would have seen this proposal as a threat to jobs and a weakening of the category, which managed to be exempt from the Labor Reform that allows outsourcing of core activity. In the case of LATAM, however, because ABSA is also an airline, the measure would not make it illegal.

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


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