Pilot union plans to call on European regulators to close labor loophole

June 12 (Reuters) – The European Cockpit Association plans to publicly ‌call on European regulators on Friday to close a loophole that it says airlines use to avoid labor laws – hiring pilots and cabin crew through outsourcing agencies, rather than as direct employees.

That practice is common among airlines that hire out ​airplanes with crew, maintenance and insurance, known as ACMI, or “wet” leasing.

“Crew are disposable, a number in ​the system. You can get rid of them with a day’s notice,” ECA Secretary ⁠General Ignacio Plaza said in a statement to Reuters.

Latvia-based ACMI operator SmartLynx Airlines’ sudden collapse last October ​left hundreds of pilots and cabin crew hired through outsourcing agencies without jobs and many without final paychecks.

Former ​SmartLynx workers told Reuters that the airline directed them to apply through third-party staffing agencies rather than hiring them directly.

SmartLynx was one of Europe’s largest wet-lease providers, hired by airlines including Scandinavia’s SAS, India’s IndiGo and European leisure carrier TUI Airways ​to bolster capacity at times of need. It had 68 planes in its fleet in 2024, according ​to a company announcement from March 2025.

SmartLynx’s parent, Lithuania-based Avia Solutions Group, sold the airline last October for €1 million ($1.16 million) ‌to a ⁠Netherlands-based investment fund formed a month earlier and two SmartLynx executives as minority owners. The airline had €238 million in debt, 73% of it owed to other Avia Solutions companies.

It folded in November, along with subsidiaries in Malta and Estonia.

The former CEO did not respond to a request for comment, and contact details for ​the Netherlands-based fund were not ​publicly available.

Contracts reviewed by ⁠Reuters allowed salary reductions, instant termination and limited employer obligations. A contract from Dubai-based Aerviva said any disputes would be settled in English courts.

An Aerviva spokesperson told ​Reuters that it never received the necessary documents from SmartLynx to issue final ​paychecks.

A 2025 ⁠University of Ghent study found nearly 14% of more than 4,000 pilots surveyed were not direct airline employees. Of those, 65% worked for ACMI operators. They reported worse mental health, greater reluctance to report fatigue and higher ⁠job insecurity.

“This ​is not only about one airline,” Plaza said. “It is about whether ​Europe allows airlines to operate with workers who are essential in practice but invisible when responsibility is assigned.”

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