Estonia's national carrier is struggling, posting a -€11.2 million loss in 2008.

TALLINN — Estonian Air and its employee’s union are in a standoff after the financially struggling airline cut the salaries of pilots and flight attendants by 30 percent two weeks ago.

Estonia’s national carrier already reduced the salaries of office staff in the beginning of 2009 and now the labor wage cuts have expanded to include the pilots and cabin crew. The on-board employees According to the company the cut is temporary and will not last more than three months. Exactly how much the airline is saving is unclear. The union disputes the quickly-implemented decision and plans to fight it in the court.

Ilona Eskelinen, a press spokeswoman of Estonian Air said that given today’s market situation, lowering wages is inevitable.

“The dialogue with the employees is ongoing and as it is a sensitive subject for all then we are trying to find the most reasonable solution,” Eskelinen told Baltic Reports, pointing out that since affected employees will be able to work 30 percent less, the wage is not actually being lowered.

This concession is not enough for the union, though.

Rauno Menning, chairman of the Estonian Airline Pilots Association said that the carrier violated consultation procedures with the sudden salary cut and the union is planning to take its case to the labor dispute commission and court system.

“Either we will reach an agreement with the carrier or we will go and fight for our rights, we do not like this situation,” Menning told Baltic Reports.

The main shareholder of Estonian Air is the SAS Group with 49 percent, but has been looking to sell its shares since 2008. The Estonian national government controls 34 percent.