Grounded Copa offers early retirement plan

Copa Airlines whose fleet has been grounded since March 23 has  decided to offer voluntary retirement plans to employees who are of retirement age and those who have up to 10 years service

Copa calculates a fall of 70% of its income, as it faces the worst crisis in its history.

A statement, the company said that with the aim of safeguarding the sustainability of the airline and reducing the impact on its personnel, it offers its employees to take advantage of  “a voluntary program of, voluntary retirements, retirements and early retirements, in adherence to the labor laws of each country, seeking to adjust to this new reality and with the intention of impacting its personnel as little as possible ”.

On the other hand, based on the Labor Code, and the stipulations of Executive Decree 81 of March 20, 2020, of the Government of the Republic of Panama, the airline has requested from the Ministry of Labor and Labor the temporary suspension of contracts, as of May 1, 2020.

“Even though at this time the company has not made the decision to avail itself of this suspension, it must be prepared in the event that this is necessary, in the context of a recovery of its operations that will take many years and will be gradual, due to the severe crisis generated by COVID-19, “said the airline.

The temporary suspension of contracts implies that workers are not required to provide the service and employers are not required to pay wages. However, the worker does not lose any of his rights, so the measure does not imply termination of the contract, nor does it exempt from the obligations of both parties, which arose previously in the labor agreement, nor will it affect the seniority of the workers.

The suspension of contracts on a temporary basis would be done gradually and depending on the needs of the company. These needs will be determined by the start of operations and the amount of demand generated on the routes operated by Copa Airlines.

Panama suspended all international flights and closed the Tocumen airport until April 23. The measure was adopted to face the advance of the coronavirus in the country.

Although this was the period set by the Executive, there is still no certainty that by this date the airport will be operating.

 In addition, when the terminal reopens, it will remain to be seen the number of flights that Copa Airlines can carry out, depending on the air restrictions of the countries it flies to and the number of travelers that demand its services.

Until the coronavirus, Copa Airlines operated about 2,500 weekly flights, while the company’s internal calculations suggest that they could start with about 120 or 200 weekly flights.

Hence, Copa said it expects to restart operations at the end of the restrictive period with less than a fifth of all existing flight frequencies and destinations prior to the impact of COVID-19 in the region.