Airline Woes

Lufthansa Pilots Ordered Back to Work

Lufthansa 9 9 15 Getty
Finally taking off again?
  • Why it matters

    Why it matters

    Lufthansa needs to reach an agreement in the long-running wage dispute with pilots to focus on profitability and the future.

  • Facts

    Facts

    • The court has ruled that the airline’s plans for new low-cost carrier Eurowings are not an issue that can be regulated in a collective pay agreement and are therefore invalid grounds for a strike.
    • Lufthansa is coming under increasing pressure due to competition from budget airlines, particularly Irish low-cost carrier Ryanair, which wants to double in size within the next 10 years and is targeting the German market.
    • Employment law experts described the court’s verdict as “groundbreaking.”
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It was quite the unexpected outcome. Pilots at German airline Lufthansa, who have striked 13 times in the last 18 months in a long-running dispute over pay and benefits, were forced to return to work after a regional labor court banned their latest strike on Wednesday.

“We are completely surprised,” said Markus Wahl, spokesperson for the pilot union Cockpit, of the court’s decision to grant the request for a temporary injunction made by the management of Europe’s largest airline.

The court decision marked the latest twist in a battle over the future of Germany’s flagship carrier. It could prove costly for the union, from which Lufthansa may now be able to claim damages, while some experts believe it could have far-reaching implications for other businesses and the nature of strikes in Europe’s largest economy.

Lufthansa, hit by competition from low-cost carriers in Europe, is pushing to expand its own low-cost offerings. Its own pilots have been the biggest stumbling block, refusing to accept changes to their own benefits.

The rolling round of strikes have cost the airline more than €300 million in lost revenue over the last two years. In light of Wednesday’s decision, Lufthansa said it is looking into whether it can claim damages from the pilots’ union, though the prospects of success remain unclear.

With the latest ruling, the court in the German state of Hesse overturned a decision made by the lower Frankfurt labor court the previous evening. That court, like another labor court in Cologne, had declared the strike legitimate.

Lufthansa welcomed the verdict, saying it would be able to offer customers a largely normal flight schedule once again as of Thursday and offering to go back to the negotiating table. The provisional plan in place the previous day had seen the cancellation of some 1,000 of the 3,000 flights originally scheduled by the Lufthansa group, affecting mainly short and medium-haul routes.

The court’s decision is particularly astonishing because it attacked the underlying motivation for the strikes. The judges said that part of the reason for the pilots’ strike was what they called Lufthansa’s “Wings concept” – the carrier’s creation of a new low-cost airline called Eurowings. The court ruled the creation of a new subsidiary is a business decision and therefore cannot be challenged by Lufthansa’s pilots as they argue the terms of their own collective pay agreement. That made the strike “evidently unlawful,” the judges said.

It’s a landmark ruling that experts say could potentially give other companies more freedom over their strategic business decisions.

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