Lufthansa strike to hit long-haul flights

Europe’s largest airline Lufthansa’s pilots are to hold strike on Tuesday, demanding higher pay and better retirement benefits, thirteenth time in 18 months

Photo by: Reuters
Photo by: Reuters

A bird is seen near the turbine of a McDonnell-Douglas MD-11 jet of Lufthansa Cargo AG flying above the tarmac of the Yemelyanovo International Airport, August 15, 2015

German pilots' union Vereinigung Cockpit (VC) has called an all-day strike for Tuesday at Lufthansa's long-haul and cargo flights, increasing pressure on management in a long-running dispute over pay, retirement benefits and cost cuts.

The union said on Monday the strike, the 13th walkout in 18 months, would affect all long-haul passenger flights and all cargo flights out of Germany from 0600 GMT to 2159 GMT on Tuesday.

Lufthansa is trying to cut costs as it battles to maintain market share against budget rivals such as Ryanair, which are targeting Germany.

Relations between the union, which represents around 5,000 Lufthansa and Germanwings pilots, and management broke down again last week. The union has offered concessions, including increasing the average retirement age to 60 and looking at ways to bring costs down to a level comparable with easyJet.

"With our offer, we made it clear that the pilots are not against the necessary adjustments," VC spokesman Markus Wahl said in a statement on Monday.

But as a precondition for talks, VC wants Lufthansa to halt the process of employing staff on non-German contracts for the expansion of its budget Eurowings division, which has an Austrian operating licence.

In an interview with Reuters on Friday, Lufthansa chief executive Carsten Spohr said over 1,000 pilots from within the Lufthansa group and outside had applied for jobs at the unit.

"To create an airline's operating certificate in another country is something the other low-cost carriers do and we copied that model for our low-cost operation," he said.

Spohr's hard line with the pilots is reminiscent of peer Willie Walsh's stance with crew at British Airways and Iberia, with the cost cuts achieved helping parent group IAG to report stronger profits than Lufthansa or Air France-KLM .

IAG is this year aiming for operating profit in excess of 2.2 billion euros ($2.3 billion), while Spohr said on Friday Lufthansa would "comfortably" achieve its target for adjusted earnings before interest and tax of over 1.5 billion euros this year. That target does not include the impact of strikes, which have cost Lufthansa around 100 million euros this year already.

However, analysts point out Walsh was negotiating during the financial crisis and when oil prices were high, whereas Spohr has a tougher job, given the backdrop of low oil prices and rising passenger numbers.

Lufthansa said on Monday it had offered talks over the weekend. VC said the offer provided no basis for talks.

A spokesman for Lufthansa said it was confident of helping passengers to complete "a majority" of long-haul flights planned for Tuesday, either booking them onto other group airlines or different carriers.