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Lufthansa prepared to ride out strike

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Bloomberg News
Published:
FRANKFURT, Germany — Lufthansa is prepared to ride out the worst disruption in its history, signaling to its pilots that they need to make concessions similar to those of their lower-paid colleagues at the German airline.
Chief Executive Officer Christoph Franz said normal services will only resume April 5 after the three-day strike ends, and that the position between the airline and its pilots remains far apart. Lufthansa has refused to engage in talks while the disruption is in full swing, highlighting its unwillingness to give in with thousands of flights grounded.
“We have been negotiating for a long time,” Franz said in a message on Youtube. “We are striving hard that as of Saturday morning, immediately after the strike, a normal service will be provided. I can only apologize for the inconvenience.”
The pilots’ Vereinigung Cockpit union wants the company to continue paying early retirement benefits for about 5,400 pilots. Lufthansa will cancel about 3,800 flights, or more than 70 percent of scheduled services, during the strike, which comes a week after ground-control workers in Frankfurt walked off work demanding higher salaries and one-time payments.
Lufthansa is wrestling with pilots, among the best-paid group of employees, to contribute to a savings effort designed to lift operating profit to 2.65 billion euros ($3.65 billion) by next year. Making pilots contribute is a matter of fairness after ground and cabin staff already made concessions, the carrier has said.
The walkout has started a public debate about compensation, with the most senior pilots at Lufthansa earning as much as 260,000 euros, more than German Chancellor Angela Merkel. Germany’s bestselling Bild tabloid chastised pilots Wednesday for being out of touch with ordinary workers, and Der Spiegel said the group risks losing customers to other airlines including Middle Eastern carriers.
The pilot’s pay stands in contrast to other groups, including cabin crew and ground-handling workers. Lufthansa’s Austrian unit said in February it wants to hire cabin crew for an annual salary of 20,748 euros, excluding overtime pay and expense reimbursements.
The strike that’s derailed Lufthansa’s operations seeks to push through the continuation of transitional benefits, which Lufthansa pays pilots from as early as age 55 before they reach the legal retirement age. The union also wants a salary increase of more than 10 percent for cockpit staff after more than two years of failed negotiations.
Lufthansa said it offered 5.2 percent plus a one-time payment, and refrained from earlier demands to tie raises to the airline’s financial performance.
Lufthansa canceled the contract for early retirement benefits at the end of last year, and the labor union says the company may now unwind related provisions amounting to more than 1 billion euros. While Lufthansa has linked cost cutting plans to its ability to fund new planes, seats and lounges, unions have criticized it for announcing the reinstatement of dividend payments while continuing to pare employee benefits.
This week’s walkout affects Lufthansa’s main passenger airline, the Germanwings low-cost unit and cargo operations. About 100 “volunteer” pilots are pitching in, and the carrier’s regional arms and Swiss and Austrian units are not affected and will help move as many passengers as possible. The carrier has more than 100 planes and more than 1,500 crew members stuck abroad due to the strike.

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