Belgian carriers urge government to reduce labour costs

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Belgian airlines have called on the country's government to resolve an apparent cost disadvantage with foreign carriers arising from different social security obligations for crew.

Belgium's social security contributions are among the highest in the European Union. While national airlines have to account for these costs, EU law allows foreign operators to pay social security contributions for locally based crew in their headquarters country.

Belgian carriers thus have to pay up to 60% more social security contributions for flight crew on a typical flight from Charleroi airport to Malaga, Spain, when compared with foreign-registered operators, says Brussels Airlines.

The carrier called on the government to create a "level playing field" for itself, Thomas Cook Airlines Belgium and TUI Airlines' affiliate JetAirFly.

The European Commission recently amended the law so that airlines have to pay social security contributions where crew are based rather than in the headquarters country. But the review applies only to newly-hired pilots, with a 10-year transition period coming into play for existing employees.

Brussels Airlines says the government is exploring different proposals to resolve the dispute, but it declined to comment on how the issue should be tackled.

While it is unclear whether a further change to EU regulation is being considered, one potential solution could be to reduce domestic carrier's social security payments by transferring the respective employees to different tax statuses.

There have been similar disputes in other countries, including France and Italy.

Brussels Airlines acknowledges that the matter is "important", but the lossmaking carrier says its survival does not depend on the issue.

The airline - which is jointly owned by SN Air Holding (55%) and Lufthansa (45%) - says it plans to reduce its costs by 10-15% through a restructuring programme.